Coal India Ltd gets Finance Ministry's nod for acquiring unlisted foreign companies

Thu,3 Nov, 2011

KOLKATA: Mining company Coal India Ltd (CIL) has got the Finance Ministry's nod for acquiring stake in overseas unlisted firms.

"We have received Union Finance Ministry's clarifications sought for overseas acquisitions. The ministry permitted (us) to go ahead with acquisition of unlisted firms," CIL chairman N C Jha said on the sidelines of the company's Foundation Day celebrations attended by Coal minister Sriprakash Jaiswal.

However, the Finance Ministry has not given complete relaxation to the norm of minimum 12 per cent internal rate of return (IRR) from such acquisitions.

"The Finance Ministry has said we can go ahead with the proposals even if the return is below 12 per cent if they are for strategic reasons, but those has to be cleared by them," Jha said.

He said CIL received proposals offering IRR between 9 and 12 per cent. The Finance Ministry will scrutinise the deals offering below 12 per cent IRR.

CIL, the world's largest coal miner, failed to strike any deal due to procedural delays in approval by the government. It had sought relaxation in two parameters of overseas acquisition norms, which were allowing them to acquire stake in unlisted firms, including those offering below 12 per cent IRR.

Jha said they would now pursue with some of the proposals lying before them.

(sourced ET)