CIL in talks for buying stake in Aussie firm

s reached an advanced stage in its negotiations for buying stake in Australian company Peabody Energy Assets, a top company official said here Tuesday. 

The deal is likely to be for less than $200 million. 

"The two sides are now engaged in talks on pricing, and there also the differences are narrowing," Coal India chairman Partha Bhattacharyya told reporters. 

"We have Rs.39,000 crore of money in our balance sheet. We need to find some good investment opportunity. As an energy company, we have to do that as India being a developing country has a vast energy requirement. So we can't kept this amount locked," he said. 

The deal includes buying stake in a particular mine of the Australian company besides a long-term off-take arrangement, he said.

Coal India third most valued firm in India

 State-run Coal India has become the third most powerful Indian company with a total market capitalisation (m-cap) of Rs 2,09,671.57 crore and is only lagging behind RIL and ONGC.

The coal behemoth added another feather to its cap last week when it replaced IT giant Tata Consultancy Services (TCS) to become the country's third most coveted firm.

CIL added Rs 7,611.21 crore to its valuation, which on Friday stood at Rs 2,09,671.57 crore.

According to market analysts, investors are optimistic about the stock and looking at the cash balance of the company it is likely that it may go for acquisitions either in the domestic space or overseas.

Meanwhile, the cumulative market valuation of the eight of the top-10 firms reduced by Rs 57,044.09 crore in the past week.

RIL, the country's most valuable firm, witnessed a wealth erosion of Rs 21,270.47 crore.

Coal India bids for Colombian Coal assets

 The world's largest coal producer Coal India is learnt to have placed a bid for Colombian assets of US-based Drummond Co, as the PSU looks to buyout mines overseas as part of its Rs 6,000 crore global acquisition plan.

"The company had earlier this year placed a non-binding bid for some coal assets in Colombia which belong to Drummond business family," a person in the know of the development said. Some media reports suggested that Drummond Co has aimed to raise around USD 6 billion from sales of its assets in Colombia and had hired Bank of America-MerrillLynch for advisory services.

Neither Coal India nor Drummond Co could be contacted for comments.

In its efforts to acquire coal mines overseas and feed rising domestic demand of the fuel, the coal major has earmarked Rs 6,000 crore for acquiring assets overseas for the current fiscal.

At present, the company has shortlisted US firms Massey Energy and Peabody Energy, besides Indonesian Novem/Sinarma, for a possible partnership for their respective mines in Australia, Indonesia and the US. In another arrangement, CIL shortlisted Peabody Energy and 11 others as possible partners for sourcing coal to India.

Coal India, which has domestic market share of over 80 per cent, has maintained that it is sitting on a cash reserve of over Rs 30,000 crore to part-fund its growth projects.

"Coal India finds Drummond's valuation for the asset to be a costly proposition. Moreover, its emphasis is on buying stake in listed global companies," the source said, indicating that the navratna firm might not be aggressive on the buyout.

The company, which has plans to import six million tonnes of coal this fiscal for local firms, has targeted to produce 461.5 million tonnes of the fuel this fiscal as against 431.5 million tonnes last fiscal.

Coal India, which was recently listed on the bourses, on Tuesday closed at Rs 326.05 a share, down 1.33 per cent on the Bombay Stock Exchange from its previous close.