The Cabinet Committee on Economic Affairs today approved the disinvestment of 5 percent equity of Neyveli Lignite Corporation (NLC), out of its holding of 93.56 percent through an Offer For Sale (OFS) in the domestic market according to Securities and Exchange Board of India (SEBI) rules and regulations. The authorized capital of NLC is Rs. 2,000 crore of which the issued and subscribed equity capital as on 31st March, 2012 is Rs.1,677.71 crore comprising 167.771 crore equity shares of face value of Rs.10 each. After this disinvestment, Government of India`s holding in the company would come down to 88.56 percent.

NLC is a Central Public Sector Enterprise with Navratna status under the administrative control of the Ministry of Coal. NLC was incorporated in the year 1956 under the Companies Act, 1956 with the objective of meeting the electricity demand of the southern states of India by excavating lignite for generation of power. The Company currently has lignite mines and power stations in Tamil Nadu and Rajasthan.

SC/SH/SKS

(Release ID :96672)

Disinvestment of equity approved via domestic Offer For Sale under SEBI rules reducing government stake in NLC. Approval was granted for the disinvestment of five percent of paid-up equity of Neyveli Lignite Corporation Ltd., to be effected through a domestic Offer For Sale under SEBI rules, thereby reducing the Government of India's shareholding. The release identifies the OFS as the operative transfer mechanism and records the company's authorised and issued equity capital and its status as a Navratna Central Public Sector Enterprise under the administrative control of the Ministry concerned.