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Coal India’s buyback offer will open on October 3 and remain open till October 18. This maharatna is looking to buy back 10.90 crore fully paid-up equity shares of ₹10 each at ₹335 a share totalling ₹3,650 crore.
The maximum number of equity shares (10.90 crore) proposed to be bought back represents 1.72 per cent of the total number of shares in the paid-up capital. As much as 15 per cent of the number of shares to be bought back has been reserved for small shareholders.
This buyback will be open to all existing shareholders as on record date of September 9, on a proportionate basis, through the tender offer process, SBI Capital Markets said in the ‘Letter of Offer’ filed with BSE on Tuesday.
Funding via FDs, MFs SBI Capital Markets is the manager for the buyback offer. This is the first time ever that Coal India is going in for a buyback of its equity shares. The buyback funds will be met out of fixed deposits lying with the banks and investments in mutual funds made by the company, sources said. There is no plan to raise additional debt for the explicit purpose of buyback.
Govt holds 79.65% The promoter — President of India acting through Coal Ministry — will be eligible to participate in the buyback process. As on July 11— when Coal India board approved the buyback proposal, the promoter had shareholding of 79.65 per cent in Coal India. The promoter has already conveyed its intent to participate in the buyback process.
The buyback will be implemented using the “mechanism for acquisition of shares through stock exchange” notified by SEBI in April 2015.
The Centre is pinning its hopes on the buyback route in several top-notch listed PSUc including Coal India to help meet its disinvestment target of ₹56,500 crore this fiscal.
srivats.kr@thehindu.co.in
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