It is reported that India's steel ministry has approved a plan to sell shares in state run Steel Authority of India Limited to help fund the firm's expansion and cut the government deficit.
The two phased sale would be a mix of a government stake sale and an issue of fresh shares by the company.
The report comes as the government considers minority stake sales in various state run firms from NTPC to miner Manganese Ore India to raise funds to cut the hefty fiscal deficit. The stake sale and issue of fresh shares in SAIL, India's largest steel producer by volume, would cut the government's holding to around 68% from 85.82%.
In the first phase, the government would sell 5% of its shareholding while SAIL will issue an additional 5% equity, the report said. The government plans to sell a total of 10% of its holding, while the company is expected to issue additional shares worth 10% of the expanded equity base.
The amount of money to be raised from the share sale would be fixed after cabinet gave its approval. The timing of the share sale would be announced later.
SAIL plans to raise its annual hot metal production capacity to 23.5 million tonnes by the financial year ending March 2012 from the current 14.6 million tonnes. The steel ministry official said SAIL will use the share sale money to partly fund its expansion.
(Sourced from http://www.steelguru.com/news/index/2009/10/23/MTE3MTQ1/India_steel_ministry_plans_to_sell_shares_in_SAIL.html)
Thursday, October 22, 2009
India steel ministry plans to sell shares in SAIL
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