State-owned Coal India (CIL), which is mulling over 15 per cent stake dilution, will soon seek legal opinion on reserving some shares for its employees and land losers, as suggested by the disinvestment department.
"As suggested by the disinvestment department. Coal India will soon take the advice of a legal firm on the matter of allotting shares to its employees and land-losers," a top government official told PTI.
Coal Minister Sriprakash Jaiswal had earlier said that the Navratna company could sell a maximum of 10 per cent stake. However, CIL wants to reserve 5 per cent stake for its employees and land losers in the proposed divestment.
The government holds 100 per cent equity in the coal firm. Jaiswal had earlier ruled out raising additional equity by CIL as part of the proposed disinvestment programme.
Of the 5 per cent, 3 per cent is for the employees as stock options and 2 per cent for those whose land have been acquired or could be acquired in the future by the firm for mining purposes.
Also, the official said the coal major will appoint a Merchant banker to oversee its internal financial structure and suggest reforms.
CIL spokesperson could not be reached for comments.
"CIL will soon invite a tender to shortlist an investment banker for the purpose," the official added.
CIL is in active discussions with divestment department to comply with all the norms for the selloff process. It was conferred with the Navratna tag last year and was asked to get listed on the bourses by September 2011.
Going by the pace of the regulatory process, the divestment proposal may well reach the Cabinet in next two-three months, he said, adding the company plans to file the draft red herring prospectus by next July-August.
In September, the ministry approached the divestment department for determining the value of CIL shares and sought the Law Ministry's opinion on certain contents of the plan.
CIL has held several meetings with the market regulator Sebi and is working to abide by certain norms for listed entities like appointment of independent directors.
The coal major has a paid-up equity capital of around Rs 6,316 crore. It clocked a pre-tax profit of Rs 8,738.46 crore last fiscal.
