New Delhi: Responding to a demand from a key ally, Dravida Munnetra Kazhagam (DMK), the UPA Government has decided to reserve a "sufficient" number of shares of Neyveli Lignite Corporation (NLC) for its employees. The decision is in response to a letter from Chief Minister M. Karunanidhi to Prime Minister Manmohan Singh and Finance Minister P. Chidambaram on Sunday, urging them to reconsider the decision to disinvest 10 per cent of government shareholding in NLC. He suggested that if the decision on disinvestment could not be reversed, the Centre consider giving the shares to NLC employees.

Giving the assurance, Prime Minister Manmohan Singh has said this will give the employees a stake in the future of the corporation.A statement issued by the Prime Minister's Office said: "In response to the request from Tamil Nadu Chief Minister M. Karunanidhi, the Prime Minister has assured that while disinvesting ten per cent of shares of NLC, the government will provide for sufficient allocation of shares to the employees." The shares would be allotted on preferential basis.

On June 22, the Centre decided to sell 10 per cent of its equity in the National Aluminium Company Limited (NALCO) and NLC through the book building process. At the current prices, it is estimated that the sale of equity in NLC will yield Rs. 1,100 crore while Rs. 1400 crore will be raised from selling shares in the NALCO.

The funds will be placed in the National Investment Fund, which will be managed by the Life Insurance Corporation, the State Bank of India and the Unit Trust of India.

After the disinvestment, the government equity in NLC will dip to 83.56 per cent from the present 93.56 per cent.

Trade unions had announced that NLC employees will strike work from July 4 if the order on disinvestment is not withdrawn.

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