Coal news and updates

Coal India arm in east leaves illness behind

Eastern Coalfields Limited, a wholly owned subsidiary of Coal India, is hoping to shed its sick-company tag early and register a positive net worth following a recent hearing at the Board for Industrial and Financial Reconstruction.

An ECL official told The Telegraph that the BIFR has “expressed satisfaction on the progress” made by the company at the hearing yesterday.

The official added that the company was now in a position to approach parent Coal India Limited for a debt waiver and the conversion of Coal India’s advances into equity.

“We are earning profit and have already improved out net worth over the last few years. Once Coal India board approves of debt waiver and equity conversion, the net worth would become positive. We are hoping that this happens soon,” the official said. ECL has internally set a target of registering a positive net worth in 2015-16.

ECL was first referred to the BIFR in 1997 after its accumulated losses exceeded its net worth. In 1998, it turned around after a financial restructuring which involved the conversion of debt into equity. ECL was once again referred to the BIFR in 1999.

The company’s net worth has improved since then. As of March 31, 2014, its net worth stood at Rs (-) 1,586.37 crore against Rs (-) 2,458.60 crore a year ago.

The ECL official said as part of the revival package, the miner was supposed to increase production of coal from its opencast and underground mines as well as increase offtake and reduce manpower.

ECL produced higher coal last fiscal at 36.05 million tonnes (mt) against 33.90mt a year ago; offtake rose to 36.35mt from 35.84mt.

In the April-August period of the current fiscal, ECL met 95 per cent of its target, producing 13.19mt. Manpower has also been lowered to 71826 at the end of 2013-14 from 74276 a year ago.

CIL chairman

Coal India today said the government had decided to extend the tenure of acting chairman A.K. Dubey for another three months.

Source: The Telegraph