Business Daily from THE HINDU group of publications
Tuesday, Jul 04, 2006
Industry & Economy - Disinvestment
Government - Politics
Corporate - Trade & Labour Unions
PM assures shares to NLC staff
Trigger effect likely
The Prime Minister's offer to NLC employees is expected to lead to similar demands from employees in other disinvested companies such as Balco and VSNL and also in Nalco.
New Delhi , July 3
The Prime Minister, Dr Manmohan Singh, has agreed to offer employees of Neyveli Lignite Corporation (NLC) substantial amount of shares on preferential allotment basis as and when the Government sells 10 per cent stake in the company. However, the exact percentage of shares to be allotted to the employees is yet to be decided.
The Prime Minister's assurance comes in response to a request from the DMK Chief and Tamil Nadu Chief Minister, Mr M. Karunanidhi, for allocation of shares to the company's employees.
However, the Prime Minister's assurance failed to placate the Neyveli employees who have given a call for indefinite strike from Tuesday.
"The Prime Minister has assured that while disinvesting 10 per cent of the shares of Neyveli Lignite Corporation, the Government will provide for sufficient allocation of shares to the employees, as desired by them, on a preferential basis so that they have a stake in the future of the corporation," an official statement issued by the Prime Minister's Office (PMO) said.
On June 22, the Cabinet Committee on Economic Affairs (CCEA) had approved selling of 10 per cent stake in Neyveli and Nalco. Post disinvestments, the Government's holding will stand as 83.56 per cent in Neyveli Lignite and 77.15 per cent in Nalco.
Based on the current price of the companies' shares on the stock exchanges, the Government expects to raise around Rs 1,100 crore from the sale of NLC and around Rs 2,000 crore from the sale of Nalco.
The funds raised through the sale would go to the National Investment Fund (NIF), which would be managed by LIC, SBI and UTI.
The Prime Minister has, however, made no offer of preferential allotment to the employees of Nalco, though there has been widespread agitation in Orissa against the disinvestment decision.
The Prime Minister's offer to NLC employees is expected to lead to similar demands from employees in other disinvested companies such as Balco, and VSNL and also in Nalco.
NLC shares closed at Rs 61.65 today on the BSE and National Stock Exchange.
Our Chennai Bureau reports:
NLC on Monday informed the stock exchanges that the unions of workers and Association of Engineers and Officers had announced an indefinite strike, "commencing from the night shift of July 4, in protest against the Union Government's decision to disinvest 10 per cent of the company's equity stake.
"We are keeping our fingers crossed," a senior official from the company's management told Business Line on Monday. Asked if NLC had evolved a strategy to secure power generation, he said the company was working on it.
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