Business Daily from THE HINDU group of publications
Tuesday, Oct 02, 2007
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Business Daily from THE HINDU group of publications Tuesday, Oct 02, 2007 ePaper |
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Corporate
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Overseas Investments Industry & Economy - Coal Coal SPV may look at iron ore blocks
“The SPV is likely to take shape soon with the Steel Ministry planning to put the proposal before the Cabinet.” Phalguna Jandhyala New Delhi, Oct. 1 The special purpose vehicle (SPV) promoted by five public sector undertakings (PSUs) to scout and acquire coal properties abroad might also look at acquiring iron ore blocks. “Though the first priority of the SPV would be to acquire coal blocks, a couple of companies have said that they would also like to scout for the acquisition of iron ore blocks and we are not averse to this idea,” Steel Secretary, Mr R.S. Pandey, told on the sidelines of an event here on Monday. The five PSUs who are part of the SPV are Steel Authority of India Ltd (SAIL), Rashtriya Ispat Nigam Ltd (RINL), National Mineral Development Corporation (NMDC), NTPC Ltd and Coal India Ltd (CIL). The acquisitions are to be undertaken with a view to ensure coal supplies for the steel and power sectors. Mr Pandey also said that the SPV is likely to take shape soon with the Steel Ministry planning to put the proposal before the Cabinet. “It is just a matter of days before the proposal is sent to the Cabinet for final approval,” he added. The proposed SPV last month got the necessary clearances from the Finance Ministry and a couple of the other departments, including the Planning Commission. The SPV does not call for budgetary support and the understanding among all the companies is that a portion of their profits would be made available. The shareholding pattern of the new company would be in proportion to the coal requirement of the individual company. The SPV would have an authorised capital of Rs 10,000 crore and a paid-up equity of Rs 3,500 crore. While SAIL and CIL would chip in with Rs 1,000 crore each, the other three companies would contribute Rs 500 crore. Meanwhile, the process of signing the memorandum of understanding by all the companies involved has been completed. The SPV is expected to meet around 10 per cent of the requirement of SAIL and RINL. Currently, both the companies import around 15 million tonnes (mt), but this is expected to go up to around 45 mt to 50 mt by the time the expansion and modernisation plans of both the companies are completed. The SPV would be looking at three routes for acquiring the stake. It might look at the possibility of a buyout of an existing coalfield or may look at buying a stake through the stock exchange and lastly may take the prospecting route. More Stories on : Overseas Investments | Coal | Minerals
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