Coal news and updates

New norms for cos’ name change in coal linkages

April 9: The Ministry of Coal (MoC) informed that the project for which long-term linkage/LoA was granted shall remain unaltered and its location should not have changed, except as provided for in accordance with a previous office memorandum dated April 5, 2011. This proposal comes in response to various pleas for accepting name change of companies for the purpose of continuation of coal linkages.

The ministry has decided on a few other guidelines too in consultation with the Department of Legal Affairs, Ministry of Law and Justice, an official communique said.

The guidelines also specify that the terms and conditions under which the original long-term linkage/LoA/FSA was granted shall remain un-altered and that promoters of linkages /LoA/FSA holder company should not have divested 50% or more shareholding in the company without achieving a significant level of investment in the project. The significant level of investment may be treated as at least 50% of the total project cost as certified by the lead lender.

In addition, the following basic principles will have to be kept in mind:

1. There should be a categorical certificate by the company secretary certifying that all procedural and legal requirements under the Companies Act, 2013
   have been complied with;
2. The new entity should be fully eligible for the coal linkage;
3. It must expressly agree to comply with all the terms and conditions already in force;
4. It must pay its past dues, if any, related to coal supplies;
5. It must be ready to execute necessary agreements.

The new policy shall apply to requests for change of name, and consequential transfer of linkage, received after the publication of the new policy guidelines. All the existing pending applications for change of name shall be disposed of as per extant instructions/guidelines already in force.