Cabinet nod for SPV to acquire coal assets abroad
The government on Thursday approved setting up of an special purpose vehicle (SPV) with a war chest of Rs 10,000 crore for acquiring coal assets abroad.
By TNN |
NEW DELHI: The government on Thursday approved setting up of an special purpose vehicle (SPV) with a war chest of Rs 10,000 crore for acquiring coal assets abroad. The proposed SPV would be empowered with the autonomy and freedom available to Navratna companies even though it will not be declared a Navratna.
An initial equity capital of up to Rs 3,500 crore would be contributed by SAIL (Rs 1000 crore), RINL (Rs 500 crore), CIL (Rs1000 crore), NTPC (Rs 500 crore) and NMDC (Rs 500 crore) to kick-start the SPV. Provisions would also be provided for inducting private sector partners when warranted.
“The Union Cabinet today gave its approval to the SPV formed by the steel companies to acquire coal properties abroad,” finance minister P Chidambaram said after the Cabinet meeting.
The Cabinet also gave the approval for formation of a committee of secretaries comprising secretaries of the ministries of steel, mines, power, finance, coal, external affairs, law & justice and department of public enterprises to approve overseas investment proposals of this SPV for acquiring metallurgical coking coal assets exceeding Rs 1500 crore.
The government was earlier considering a four way joint venture. However, NMDC has also shown interest in joining the SPV. “Efforts are on to identify properties in Australia or Canada, but the nature of acquisition in these mines is not decided yet. However, we have asked the PSUs to intensify their efforts in acquiring coal properties by choosing a team of officers for this purpose,” an official said.
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 acquisition. Heads of all the four PSUs would participate in its board.
The new venture has been proposed as an alternative to proposed plan to set up Coal Videsh (CVL) as a subsidiary of CIL. It would present a strong Indian contender in a highly competitive international market for securing energy resources.
An initial equity capital of up to Rs 3,500 crore would be contributed by SAIL (Rs 1000 crore), RINL (Rs 500 crore), CIL (Rs1000 crore), NTPC (Rs 500 crore) and NMDC (Rs 500 crore) to kick-start the SPV. Provisions would also be provided for inducting private sector partners when warranted.
“The Union Cabinet today gave its approval to the SPV formed by the steel companies to acquire coal properties abroad,” finance minister P Chidambaram said after the Cabinet meeting.
The Cabinet also gave the approval for formation of a committee of secretaries comprising secretaries of the ministries of steel, mines, power, finance, coal, external affairs, law & justice and department of public enterprises to approve overseas investment proposals of this SPV for acquiring metallurgical coking coal assets exceeding Rs 1500 crore.
The government was earlier considering a four way joint venture. However, NMDC has also shown interest in joining the SPV. “Efforts are on to identify properties in Australia or Canada, but the nature of acquisition in these mines is not decided yet. However, we have asked the PSUs to intensify their efforts in acquiring coal properties by choosing a team of officers for this purpose,” an official said.
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 acquisition. Heads of all the four PSUs would participate in its board.
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The new venture has been proposed as an alternative to proposed plan to set up Coal Videsh (CVL) as a subsidiary of CIL. It would present a strong Indian contender in a highly competitive international market for securing energy resources.
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