$2.3-b PSU to hunt for global coal assets
The new entity may also rope in private sector companies such as Tata Steel and “reputed MNCs” as partners in specific projects, the source said.
By Subhash Narayan, TNN |
NEW DELHI: THE government is setting up a mega PSU with a war chest of around $2.3 billion (Rs 10,500 crore) for acquiring coal assets abroad. A Cabinet note is being finalised by the steel ministry to set up a special purpose vehicle (SPV) in partnership with five profit-making PSUs—SAIL, NTPC, Coal India (CIL), Rashtriya Ispat Nigam (RINL) and National Mineral Development Corporation (NMDC)—a government source said.
The five coal-producing and consuming companies would together put in an equity component of around Rs 4,000 crore in the proposed venture. The PSUs have been asked to prepare a proposal (for participation in the SPV) for approval from their respective boards.
The new entity may also rope in private sector companies such as Tata Steel and “reputed MNCs” as partners in specific projects, the source said.
As per the proposal, SAIL, NTPC and CIL would contribute Rs 1,000 crore each as equity for the new entity while RINL and NMDC would put in Rs 500 crore each. Based on this, the company would leverage debt of about Rs 6,500 crore taking the size of war chest to Rs 10,500 crore. However, the exact equity and debt components would be worked out later. The government was earlier considering a four-way joint venture. This plan changed recently with NMDC showing interest in joining the SPV. “We have already agreed to provide Rs 1,000-crore equity to the proposed venture,” CIL chairman PS Bhattacharyya told ET.
The proposal also includes powers of a navratna company for the new entity. It would, however, be kept outside the purview of CVC guidelines for facilitating quick clearances for large acquisitions.
The new entity would be placed directly under control of an empowered committee of secretaries with full powers on the lines similar to empowerment for oil block acquisitions. Heads of all the five PSUs would participate in its board.
subhash.narayan@timesgroup.com
The five coal-producing and consuming companies would together put in an equity component of around Rs 4,000 crore in the proposed venture. The PSUs have been asked to prepare a proposal (for participation in the SPV) for approval from their respective boards.
The new entity may also rope in private sector companies such as Tata Steel and “reputed MNCs” as partners in specific projects, the source said.
As per the proposal, SAIL, NTPC and CIL would contribute Rs 1,000 crore each as equity for the new entity while RINL and NMDC would put in Rs 500 crore each. Based on this, the company would leverage debt of about Rs 6,500 crore taking the size of war chest to Rs 10,500 crore. However, the exact equity and debt components would be worked out later. The government was earlier considering a four-way joint venture. This plan changed recently with NMDC showing interest in joining the SPV. “We have already agreed to provide Rs 1,000-crore equity to the proposed venture,” CIL chairman PS Bhattacharyya told ET.
The proposal also includes powers of a navratna company for the new entity. It would, however, be kept outside the purview of CVC guidelines for facilitating quick clearances for large acquisitions.
The new entity would be placed directly under control of an empowered committee of secretaries with full powers on the lines similar to empowerment for oil block acquisitions. Heads of all the five PSUs would participate in its board.
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subhash.narayan@timesgroup.com
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