The Hindu : Front Page : Nod for 10 p.c. divestment in NALCO, NLC

Online edition of India's National Newspaper
Friday, Jun 23, 2006

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Nod for 10 p.c. divestment in NALCO, NLC

Special Correspondent

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New Delhi : The Government on Thursday cleared the sale of 10 per cent equity stake in the public sector National Aluminium Company Limited (NALCO) and Neyveli Lignite Corporation (NLC). The exercise will raise Rs. 2,500 crore.

Disclosing this after a meeting of the Cabinet Committee on Economic Affairs here, Finance Minister P. Chidambaram stressed that the navaratna companies were not being touched and disinvestment in the few non-navaratnas was in continuation of an earlier decision. It was in line with the consensus reached with the Left parties in November last.

Book building process

The disinvestment in NALCO and NLC would take place through the book building process. At current prices, the sale of equity in NALCO was expected to yield Rs. 1,400 crore and in NLC Rs. 1,100 crore.

The money would be parked in the National Investment Fund, which is to be managed by the Life Insurance Corporation, the State Bank of India and the Unit Trust of India. The Fund would utilise 75 per cent of its resources for social sector schemes and 25 per cent for reviving sick public sector companies, said Mr. Chidambaram.

After disinvestment, the government equity in NALCO will fall to 77.15 per cent and in NLC to 83.56 per cent.

"Creeping privatisation"

Left parties and trade unions denounced the disinvestment as "creeping privatisation" and said it went against the National Common Minimum Programme. Communist Party of India (Marxist) Polit Bureau member Sitaram Yechury denied that the Left had agreed to disinvestment as was claimed by Mr. Chidambaram.

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