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Govt asked to divest stake in Coal India arm
April 01, 2003 14:51 IST
Disinvestment Commission has recommended sale of 49 per cent stake in mining consultancy subsidiary Central Mine Planning and Design Institute to a strategic partner after making it an independent company.
In its 18th report submitted recently, the commission also favoured sale of 100 per cent equity in Karnataka Antibiotics, a joint venture between Karnataka government and the centre.
The commission has argued that CMPDIL, one of the eight subsidiaries of Coal India Ltd should be made an independent company by separating it from its parent.
Coal India would sell its equity in the company to the government thereby withdrawing itself from the company.
Fearing that there would be no takers for the consultancy arm at this juncture, given the current regulatory regime which prohibits private coal mining, the commission said that while disinvesting its equity, the government should indicate time period within which it would privatise the company to attract prospective bidders.
A commitment towards this extent should be incorporated in the transaction documents at the time of the first phase of divestment.
Government would take a view on the balance holding within five years or whenever the amendment to the Coal Mines Nationalisation Act, permitting private entry in the sector, takes place depending on whichever is earlier.
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