New Delhi: The share buyback programme worth Rs 3,650 crore of Coal India would open next week on October 3. The state-owned company informed about the "Letter of Offer" in a BSE filing. SBI Capital Markets is the manager to the buyback offer that closes on October 18.
The offer would be for buyback of equity shares not exceeding 10,89,55,223 of face value of Rs 10 each at a price of Rs 335 per equity share for cash aggregating up to Rs 3,650 crore on a proportionate basis, from the eligible shareholders by way of a tender offer through the stock exchange mechanism, the filing said.
"The offer size represents approximately 24.95 per cent of the aggregate of the fully paid-up share capital and free reserves, as per the audited accounts of the company for the financial year ended March 31, 2016 and is within the statutory limits of 25 per cent of the aggregate of the fully paid up share capital and free reserves...," it said.
The government has approved buyback of shares by PSUs as it feels leveraging surplus cash would be the best option for them rather than going for disinvestment. Buyback helps a company reduce equity by using idle cash and hence provide better returns to shareholders. The government aims to collect Rs 56,500 crore through disinvestment in PSUs this fiscal.