The Hindu Business Line : Finance Ministry gives nod for coal SPV

New Delhi, Aug. 20 The Finance Ministry has given its approval to set up a special purpose vehicle (SPV) promoted by five public sector companies to scout and acquire coal properties abroad.

“Apart from the Finance Ministry, we have also got to know that a couple of other departments including the Planning Commission have given their consent for the SPV,” a source told Business Line.

The acquisitions of the SPV will be to ensure coal supplies for the steel and power sectors.

The five public sector units that would participate in the SPV are Steel Authority of India Ltd (SAIL), Rashtriya Ispat Nigam Limited (RINL), National Mineral Development Corporation (NMDC), NTPC Ltd, and Coal India Ltd (CIL). The SPV would have an authorised capital of Rs 10,000 crore and a paid up equity of Rs 3,500 crore. While SAIL and CIL would chip in with Rs 1,000 crore each, the other three would contribute Rs 500 crore.

“All the companies that are involved with the SPV would be signing the MoU soon and we have also been told that the final Cabinet note is being circulated and will be sent for getting the requisite approval soon,” Mr P K Bishnoi, Chairman and Managing Director of RINL, said on the sidelines of an event here on Monday.

He added that the SPV would approximately cater to around 10 per cent of the requirement of SAIL and RINL. Both the companies import around 15 million tonnes, but this is expected to go up to around 45 to 50 million tonnes by the time the expansion and modernisation plans of the companies are completed.

“The SPV would be looking at three routes for acquiring the stake. Firstly, we might look at the possibility of a buyout of an existing coalfield or may be looking at buying a stake through the stock exchange and lastly may take the prospecting route. The route adopted, however, would vary from country to country,” Mr Bishnoi said.

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