Coal India union says to oppose any stake sale

Written By Unknown on Sabtu, 19 Juli 2014 | 15.45

The government, which has a 90 percent stake in the company whose total value is about USD 40 billion, is considering the sale of a 10 percent stake, according to official sources.

Unions representing workers at Coal India  Ltd, the world's largest coal miner, will oppose any move to sell a stake in the state-owned company as part of the new government's plan to shore up its finances, a union leader said on Friday.

The government, which has a 90 percent stake in the company whose total value is about USD 40 billion, is considering the sale of a 10 percent stake, according to official sources.

Prime Minister Narendra Modi's administration is looking to raise a record USD 10.5 billion from asset sales this fiscal year ending March 31 to keep the deficit under control.

"We will not allow the government to sell any stake and will hit the streets if needed," said DD Ramanandan, vice president of the All India Coal Workers Federation, one of five unions representing workers at the company.

Union leaders representing more than 350,000 Coal India workers will meet on Aug. 31 in Pune to discuss their strategy.

Last year unions successfully blocked the previous government's move to sell a 10 percent stake of the company. Workers fear divestment or any restructuring of the company would eventually lead to jobs cuts.

The unions are also opposed to Power and Coal Minister Piyush Goyal's order to Coal India to reduce the volume of coal sold through electronic auctions that fetch higher prices, Ramanandan said.

Goyal said last month selling less via auction will help improve supplies to fuel-starved but debt-ridden power firms. Ramanandan said it was a plan to help "the big industrialists get cheap coal".

A spokesman for the Coal and Power Ministry had no comment.

Coal India, which produced 462 million tonnes in its last fiscal year, sells about 7 percent through e-auction, mainly to cement and other industries .

Coal India stock price

On July 18, 2014, Coal India closed at Rs 375.35, down Rs 0.35, or 0.09 percent. The 52-week high of the share was Rs 423.50 and the 52-week low was Rs 238.35.


The company's trailing 12-month (TTM) EPS was at Rs 23.76 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 15.8. The latest book value of the company is Rs 56.24 per share. At current value, the price-to-book value of the company is 6.67.


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