The world's largest coal producer Coal India (CIL) is learnt to have placed a bid for Colombian assets of US-based Drummond Co, as the PSU looks to buyout mines overseas as part of its Rs 6,000 crore global acquisition plan.
"The company had earlier this year placed a non-binding bid for some coal assets in Colombia which belong to Drummond business family," a person in the know of the development said. Some media reports suggested that Drummond Co has aimed to raise around $6 billion from sales of its assets in Colombia and had hired Bank of America-MerrillLynch for advisory services.
Neither Coal India nor Drummond Co could be contacted for comments.
In its efforts to acquire coal mines overseas and feed rising domestic demand of the fuel, the coal major has earmarked Rs 6,000 crore for acquiring assets overseas for the current fiscal.
At present, the company has shortlisted US firms Massey Energy and Peabody Energy, besides Indonesian Novem/Sinarma, for a possible partnership for their respective mines in Australia, Indonesia and the US. In another arrangement, CIL shortlisted Peabody Energy and 11 others as possible partners for sourcing coal to India.
CIL, which has domestic market share of over 80 per cent, has maintained that it is sitting on a cash reserve of over Rs 30,000 crore to part-fund its growth projects.
"CIL finds Drummond's valuation for the asset to be a costly proposition. Moreover, its emphasis is on buying stake in listed global companies," the source said, indicating that the navratna firm might not be aggressive on the buyout.
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The company, which has plans to import 6 million tonnes of coal this fiscal for local firms, has targeted to produce 461.5 million tonnes of the fuel this fiscal as against 431.5 million tonnes last fiscal.
CIL, which was recently listed on the bourses, today closed at Rs 326.05 a share, down 1.33 per cent on the Bombay Stock Exchange from its previous close.