The Hindu Business Line : 5 PSUs join hands to float Coal Ventures International

New Delhi, Nov. 30 The new special purpose vehicle (SPV) formed by the five public sector undertakings to scout and acquire coal properties abroad will be called Coal Ventures International.

“The company will have a three-tier structure and the Chairman of Steel Authority of India (SAIL) will be the first Chairman of the SPV. The chief executives of the other four companies will also be on the main board of the new company,” Mr P.K. Bishnoi, Chairman and Managing Director of Rastriya Ispat Nigam Ltd (RINL), said here on Thursday.

He added that the new company will also have functional directors and a business development group consisting of officials from the five companies who would look into the day-to-day affairs.

The five PSUs who are part of the SPV, which was recently cleared by the Cabinet, are SAIL, RINL, National Mineral Development Corporation (NMDC), NTPC Ltd, and Coal India Ltd (CIL). The acquisitions are to be undertaken with a view to ensure coal supplies for the steel and power sectors.

Capital

The SPV would have a total authorised capital base 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 companies would contribute Rs 500 crore.

According to Mr Bishnoi, the SPV would be looking at two routes for acquiring the stake in coal blocks. “The first option will be to go through the prospecting route and the second would to buy equity or by negotiated settlements. We are also looking for a good investment banker and an expression of interest (EoI) will be issued shortly. The investment banker will help in scouting for the proposed acquisitions,” he added.

Routers

The prospecting route will be taken for acquiring coal fields in Zimbabwe, Russia, Indonesia and Mozambique. The equity route will be used for picking up stake in Australian, Canadian and Brazilian companies.

The SPV is expected to meet around 10 per cent of the requirement of SAIL and RINL. Currently 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 both the companies are completed.

He also said that they have kept the option of inviting private players from India and abroad at a later date and that the SPV might also in the future scout for acquiring iron ore blocks.

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