Tamil Nadu state units to buy 3.56 percent stake in NLC

Chennai, July 15 (IANS) Tamil Nadu Chief Minister J. Jayalalithaa Monday said the centre and the market regulator have agreed to her proposal of state public sector undertakings (PSU) acquiring 3.56 percent central government stake in the Neyveli Lignite Corporation Ltd. (NLC).

She said the transaction would cost the five state PSUs around Rs.500 crore.

The five companies that will acquire the NLC shares are: Tamilnadu Industrial Development Corporation Ltd. (TIDCO), State Industries Promotion Corporation of Tamil Nadu Ltd. (SIPCOT), Tamilnadu Industrial Investment Corporation Ltd. (TIIC), Tamil Nadu Urban Finance and Infrastructure Development Corporation Ltd. (TUFIDCO), and Tamil Nadu Power Finance and Infrastructure Development Corporation Ltd. (Powerfin).

In response to this development, the striking workers have called off their strike.

"At a meeting in Mumbai Monday, the central government and the Securities and Exchange Board of India (SEBI) have agreed to the state government's proposal of the centre diluting 3.56 percent in NLC in favour of state PSUs," Jayalalithaa said in a statement issued here.

Jayalalithaa said because of her government's actions, the NLC stake sale to private parties has been stopped.

"The victory is due to my government's continued action, my own independent steps, workers' struggle and due to the united voice of the people of the state," she said.

According to Jayalalithaa, the SEBI's regulation of having a minimum public shareholding of 10 percent in PSUs is a wrong policy as the manipulation of share prices in the market can be done only by private companies and not by PSUs.

Political parties in the state have opposed the central government's decision to divest five percent stake in NLC to meet the SEBI norms of having a minimum of 10 percent public shareholding.

Around 27,000 NLC workers were on strike since July 3 protesting the decision.

It was Jayalalithaa who suggested to the Prime Minister that the centre can dilute its stake in favour of state PSUs. She also said the dilution can be 3.56 percent as already 6.44 percent is with the public.

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