The Hindu Business Line : Ministry seeks nod for coal cos to list debt instruments

Corporate - Corporate Bonds
Industry & Economy - Coal
Markets - Regulatory Bodies & Rulings
Ministry seeks nod for coal cos to list debt instruments

Our Bureau

The instruments will become more liquid and offer investors an exit route at market-determined prices.

New Delhi , Dec. 26

In order to increase the availability of funds to companies engaged in coal exploration, the Ministry of Coal has asked the Ministry of Finance to amend certain guidelines of the Securities and Exchange Board of India and allow coal exploration companies to list their debt instruments even ahead of their equity listing.

This will make the debt instruments more liquid and offer investors an exit route at market-determined prices. As of now, the companies are not qualified to list their debt instruments because they are non-listed public sector entities.

The move is a renewed effort by the Coal Ministry to increase funding options. Earlier, the Finance Ministry had rejected a number of tax sops proposed by the Coal Ministry for coal exploration and mining operations.

The Coal Ministry has sent the proposals to the Finance Ministry for reconsideration.

Earlier, the Finance Ministry had refused to grant infrastructure status to the coal mining industry and also rejected the proposal to increase the limit on overseas debt that coal companies can raise.

It had also rejected the proposal to grant income tax exemption up to 40 per cent of the profits earned by financial institutions through investment in coal exploration, according to an official note.

The Coal Ministry had also sought 20 per cent tax rebate for investments in shares, debentures and bonds of coal mining companies or units of mutual funds subscribing to those securities up to Rs 70,000.

In its renewed effort, the Coal Ministry has again asked for these sops along with infrastructure status for the coal industry. It has added the demand for allowing listing of debt instruments of coal companies, sources said.

More Stories on : Corporate Bonds | Coal | Regulatory Bodies & Rulings

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page