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Sep 24, 2014
Coal India Ltd. (COAL) is offering higher
payouts and family benefits to workers to avoid any unrest
before the government sells a stake worth $3.5 billion in the
state-run miner.
Bonuses will be increased by almost 30 percent to 13 billion rupees ($213 million), Personnel Director R. Mohan Das said in an interview. The company will improve post-retirement health benefits and assure female workers taking early retirement that one of their children will get a job with the company, Das said.
Trade unions have vowed to go on an indefinite strike should the government proceed with the planned 10 percent stake sale. The success of the sale is crucial for Finance Minister Arun Jaitley to meet almost a third of his 634 billion rupee asset-sale target in the year to March 31.
“The government is going to follow a carrot and stick approach with the workers and unions to make the plan a success,” said Deven Choksey, managing director at Mumbai-based KR Choksey Shares & Securities Pvt. “The government is also engaging in more constructive communication with the unions so that they don’t come in the way of economic goals. Raising public shareholding will improve corporate governance in the company.”
Coal India gained as much as 2 percent to 341.90 rupees, the most in three weeks, in Mumbai. They traded at 339.25 rupees as of 10:23 a.m. local time, boosting this year’s gain to 17 percent. The key S&P BSE Sensex fell as much as 0.5 percent. The stake sale will raise about 214 billion rupees at today’s price.
Coal India’s moves aren’t convincing some unionists.
“Stake sales raise the ownership of foreign institutions in the company and we fear the company will curtail workers’ benefits to protect those shareholders’ interests,” said Jibon Roy of the All India Coal Workers Federation, a group of five major trade unions at the coal miner. “There’s an effort to dilute worker resistance but we will not agree to any disinvestment in the company.”
The cabinet on Sept. 10 approved share sales in Coal India, Oil & Natural Gas Corp. and hydropower-producer NHPC Ltd.
To contact the reporter on this story: Rajesh Kumar Singh in New Delhi at rsingh133@bloomberg.net
To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net Indranil Ghosh, Abhay Singh
Bonuses will be increased by almost 30 percent to 13 billion rupees ($213 million), Personnel Director R. Mohan Das said in an interview. The company will improve post-retirement health benefits and assure female workers taking early retirement that one of their children will get a job with the company, Das said.
Trade unions have vowed to go on an indefinite strike should the government proceed with the planned 10 percent stake sale. The success of the sale is crucial for Finance Minister Arun Jaitley to meet almost a third of his 634 billion rupee asset-sale target in the year to March 31.
“The government is going to follow a carrot and stick approach with the workers and unions to make the plan a success,” said Deven Choksey, managing director at Mumbai-based KR Choksey Shares & Securities Pvt. “The government is also engaging in more constructive communication with the unions so that they don’t come in the way of economic goals. Raising public shareholding will improve corporate governance in the company.”
Coal India gained as much as 2 percent to 341.90 rupees, the most in three weeks, in Mumbai. They traded at 339.25 rupees as of 10:23 a.m. local time, boosting this year’s gain to 17 percent. The key S&P BSE Sensex fell as much as 0.5 percent. The stake sale will raise about 214 billion rupees at today’s price.
Public Holding
The government, which owns 89.65 percent in the company, also needs to comply with a June 19 ruling by the capital markets regulator that requires state-owned companies to increase public shareholding to at least 25 percent within three years. A timeline for the sale has yet to be set.Coal India’s moves aren’t convincing some unionists.
“Stake sales raise the ownership of foreign institutions in the company and we fear the company will curtail workers’ benefits to protect those shareholders’ interests,” said Jibon Roy of the All India Coal Workers Federation, a group of five major trade unions at the coal miner. “There’s an effort to dilute worker resistance but we will not agree to any disinvestment in the company.”
The cabinet on Sept. 10 approved share sales in Coal India, Oil & Natural Gas Corp. and hydropower-producer NHPC Ltd.
To contact the reporter on this story: Rajesh Kumar Singh in New Delhi at rsingh133@bloomberg.net
To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net Indranil Ghosh, Abhay Singh
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