The Centre's delay in granting a go-ahead may cost Coal India Ltd an acquisition opportunity in Indonesia.
Sources suggest that the coal major has exceeded the June 30 timeline set by the Indonesian company.
CIL has sought the Centre's approval for acquiring 30 per cent interest in a major coal asset held by an unlisted subsidiary of a listed entity. According to guidelines, the Indian company is allowed to enter into negotiations with only listed entities.
Requests were made to relax the viability benchmark of 12 per cent internal rate of return as it was “too steep to substantiate any foreign acquisition”, required primarily to ensure coal availability of the country.
While no official confirmation was available on the issue, unconfirmed reports suggest that CIL was offered a stake by Indonesia's Golden Energy Mines, which is controlled by listed entity.
Sources in CIL are not confident if the offer from Indonesian company still exists. “We are told that they are still open. Officially, there is no communication between us since June,” a source told Business Line.
With nearly $4-billion cash reserve in place, CIL is scouting for coal assets for nearly three to four years now. So far it had only been successful in acquiring interest in two exploratory assets in Mozambique.
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