Khaitan & Co appointed legal adviser to manage CIL stake sale

Development comes ahead of the crucial meeting next week between CIL and its five workers unions which have threatened to go on a three-day strike beginning Sept 23

Government has appointed Khaitan & Co as legal adviser for managing disinvestment of 5% in Coal India, taking ahead the stake sale proposal in the PSU.

The appointment of legal adviser comes ahead of the crucial meeting next week between Coal India and its five workers unions which have threatened to go on a three-day strike beginning September 23 to protest the proposed stake sale.

"Khaitan & Co has been appointed as legal adviser for managing Coal India stake sale," a source close to the development said.

Goldman Sachs, Credit Suisse, Deutsche Bank and SBI Capital Markets are among seven merchant bankers which were earlier selected to manage the stake sale in CIL.

The government holds 90 percent stake in the company. The Disinvestment Department had earlier pared a plan to sell 10 percent stake in CIL to placate employee unions. The proposal now is to divest 5% stake in the CIL through offer for sale route (OFS).

Finance Minister P Chidambaram had earlier tried to assuage the workers unions, saying the disinvestment proceeds from the coal behemoth would be invested in PSU banks. CIL was listed on bourses in 2010 after the government raised Rs 15,199 crore by selling 10% stake in the country's biggest initial public offering.

The company has a cash balance of about about Rs 62,000 crore. The government plans to garner Rs 40,000 crore this fiscal by way of disinvestment and CIL's stake sale would be the largest.