State-run Coal India on Friday said the Department of Investment and Public Asset Management (DIPAM) has approved the proposal for the listing of its coal producing subsidiary Mahanadi Coalfields (MCL) through a combination of fresh equity issuance and disinvestment by CIL through an offer for sale (OFS).
“DIPAM/MoC has processed a proposal seeking approval of the Alternative Mechanism (AM) for the listing of Mahanadi Coalfields (MCL), based on the approvals accorded by the board of Coal India (CIL) and the board of MCL,” Coal India said in a stock exchange filing.
Coal India may disinvest its stake in MCL through Offer for Sale (OFS) of existing shares as part of the IPO of MCL and subsequently in one or more tranches. MCL may raise capital through fresh issue of equity shares as part of the IPO and/or through subsequent FPO(s), QIP(s), or other SEBI-approved methods.
“The disinvestment and capital raising may be undertaken simultaneously or separately, in one or more tranches. The overall extent of disinvestment/capital raising under the above mechanisms shall be limited to reducing CIL’s shareholding in MCL by up to 25 per cent,” the listing said.
“The proposed listing of MCL shall remain subject to prevailing market conditions and completion of all necessary statutory and regulatory formalities,” it added.
Listing approval
The board of Coal India in November last year accorded in–principle approvals for listing of Mahanadi Coalfields and South Eastern Coalfields – after the Coal Ministry had directed the company to take concrete steps to ensure listing of these two coal producing arms.
The Ministry of Coal had advised Coal India to take steps to ensure further listing of subsidiaries namely Mahanadi Coalfields Ltd (MCL) and South Eastern Coalfields Ltd (SECL). Among CIL’s seven coal-producing subsidiaries, Mahanadi Coalfields and South Eastern Coalfields are the largest two in terms of outputs.