The world's largest coal miner Coal India Ltd (CIL's) board on 14 December 2011 approved a proposal to acquire stakes in unlisted firms overseas, provided the offers were valid. The proposal was approved in the wake of Finance Ministry’s approval for the public sector firm to proceed with its plan to acquire unlisted firms overseas.
CIL plans to take up three offers - in Australia, Indonesia and the US. The PSU put together a war-chest of Rs.6,000 crore for acquisition of mines. b CIL sought clarifications from the Finance Ministry before entering into discussions with owners, having received proposals offering an IRR between 9 percent and 12 percent.
CIL had request for a relaxation in the PSU guidelines stipulating a minimum 12 percent internal rate of return (IRR) on investments. In response to the request, the Finance Ministry mentioned that CIL could proceed with such proposals, if they are of strategic nature, and subject to government clearance.
CIL also sought to sidestep the rule that only the mines of listed companies should be acquired, which was permitted by the Finance Ministry.
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