Category Archives: Business
Coal India close to sealing mine deals with Peabody
Coal India Ltd is on the verge of closing a deal with US-based miner Peabody Energy that would give it a stake in four Australian coal mines along with other overseas assets.
According to the ‘The Age’ report recently, the Indian company has said that it was in the advanced stages of negotiations for the $1 billion deal.
Coal India’s foreign-venture arm Coal Videsh chief general manager Phalguni Guha said he expected the deal with Peabody to be finalised in the next “few months”.
He, however, refused to divulge the details on the Australian mines.
The deal could include assets in the United States and Indonesia as well as Australia, Guha said.
Mines that produce both thermal coal and metallurgical coal suitable for steel production are involved.
Guha said Coal India had appointed merchant bankers to assist with finalising the deal structure.
DSP Merrill Lynch is advising Coal India on the Australian aspects of the deal, he said.
“About six months back we invited expressions of interest from companies willing to establish linkages with Coal India Limited,” he said, adding “Based on that, we got a number of offers and we selected some of them and invited them to come to India to make a presentation on what structure they had in mind and what they wanted to offer Coal India.”
According to Industry experts, several major international miners responded to Coal India’s invitation to form “strategic partnerships” including Rio Tinto, Hancock, Anglo Coal Australia and Xstrata.
Guha said the company had “a lot of money” and would explore other opportunities in Australia once the Peabody deal was signed.
“After we complete this deal we will take stock of the situation and then again start the same process,” he said.”There are a lot of possibilities. First we are going for Peabody.” news source : indiatimes.com
Coal India to invest Rs 6,000 crore in foreign acquisitions
Coal India Ltd (CIL) plans to invest Rs 6,000 crore in foreign acquisitions this financial year and is currently evaluating 10 overseas proposals that include five proposals for equity infusion. The proposals cover mining assets in countries such as the US, Australia and Indonesia.
“In addition to our capex plan of Rs 3,800 crore for 2010-11, we have earmarked Rs 6,000 crore for foreign acquisitions this financial year. Right now, we are evaluating five proposals from companies in the US, Australia and Indonesia,” CIL Chairman P S Bhattacharyya told reporters here.
Bhattacharya said the US-based Peabody Energy Corp is one of the companies that had offered to work in partnership with CIL, either through equity stake or forming a joint venture with an offtake contract. “We are working to close some of the deals in the next four to five months,” he said, adding altogether 10 proposals from five companies were taken for due diligence out of the 30 proposals received from eight large companies in response to its global expression of interest (EoI) floated in July 2009 for selecting strategic partners for overseas acquisitions.
He said the PSU would invest about $2 billion (about Rs 9,000 crore) over the next four years in foreign acquisitions and expected 50 million tonnes per annum coal from such ventures to meet the domestic demand.
CIL is also looking at an initial public offer in August, though it will be a purely offloading of equity by the government and no fresh infusion into the company. “We are awaiting government clearance. We want to file the draft red herring prospectus by June 15,” said Bhattacharya. The government plans to sell 10 per cent stake in CIL to raise about Rs 12,000 crore.
On the opposition from the trade unions, he was confident that it would be overcome. He said the Department of Disinvestment has been able to manage special dispensation, whereby employees of CIL subsidiary will be allowed to buy shares in the parent company on preferential terms.
The company clocked more than one and half times increase in net profit at Rs 8,312 crore in 2009-10 against Rs 3,435.87 crore in 2008-09. Its profit was lower last year on account of pay revision arrears amounting to Rs 3,216.5 crore.
The chairman said it was for the second time since the formation of CIL that all its subsidiaries, including ECL and BCCL, had reported profit. source from sify.com
