CIL to pay special dividend if stake sale fails: Mayaram
Coal India will have to dole out a special dividend if it fails to go ahead with the government’s disinvestment plan
“If CIL does not go for divestment, then they have to provide us a special dividend,” Economic Affairs Secretary Arvind Mayaram said in an interview.
The CIL disinvestment has been hanging fire because of opposition from the trade unions. Mayaram’s statement that the coal major will have to pay a higher dividend comes as the government’s efforts to meet its Rs 40,000 crore disinvestment target.
The government holds a 90 per cent stake in CIL.
It had been originally planned to divest 10 per cent in CIL and lowered it to 5 per cent, or 31.58 crore shares, on account of the stiff opposition. At yesterday’s closing share price of Rs 275.60, the CIL stake sale could fetch over Rs 8,700 crore.
The government is also trying to seek higher dividend from other PSUs, which are sitting on huge cash piles. At the end of the 2012-13 financial year the cash and bank balance of CIL stood at Rs 43,776 crore.
The Finance Ministry has already laid out a road map for disinvestment in the remaining days of this financial year. It includes stake sales in major PSUs such as Indian Oil, Engineers India, BHEL and Hindustan Aeronautics.
Although the government had budgeted raising Rs 40,000 crore from public sector undertaking disinvestment, it has so far garnered only Rs 3,000 crore from stake sales in seven PSUs, including Power Grid Corporation of India, Hindustan Copper, National Fertilizers and MMTC.
Receipts from dividend and disinvestment are essential for the government to rein in the fiscal deficit at the targeted level of 4.8 per cent of GDP this financial year.