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| Money matters |
New Delhi, March 23: The Cabinet Committee on Economic Affairs today cleared the proposal to wind up the Specified Undertaking of the Unit Trust of India (SUUTI) and create the National Asset Management Company (NAMC) to buy government stakes in state-owned firms.
The SUUTI was created to honour the commitment by erstwhile state-owned mutual fund, Unit Trust of India, to the investors of US-64 and other assured return schemes.
According to the proposal, the government will first transfer its stakes in L&T, ITC and Axis Bank — held through the SUUTI — to the NAMC. The SUUTI holds 11.54 per cent in ITC, 23.6 per cent in Axis Bank and 8.3 per cent in L&T. These stakes are valued at around Rs 32,000 crore.
The NAMC will then take loans from banks to buy government stakes in the PSUs, officials said.
The new entity will help the Centre to further its divestment objectives. The government aims to garner Rs 30,000 crore from stake sales in PSUs in 2012-13.
In 2011-12, the Centre will raise about Rs 14,000 crore through selloffs against a target of Rs 40,000 crore.
Nelp blocks
The CCEA has approved the award of 16 of the 33 oil and gas blocks that were bid for in the ninth round of New Exploration Licensing Policy after almost a year.
“Bids for 16 blocks were recommended for acceptance by the empowered committee of secretaries. The same has been approved by the CCEA,” he said.
The government had offered 34 areas for exploration and production of oil and gas in the ninth round of Nelp bidding. Bids were received for 33 blocks on March 28 last year.
The CCEA rejected the bids for 10 blocks because the government’s share of profit petroleum was less than 15 per cent.
Officials said the committee of secretaries had recommended the rejection of single bids for eight blocks where profit petroleum offered to the government ranged from 6.6 per cent to 6.7 per cent.
Green light for MMTC
The government has approved iron ore exports by MMTC to Japanese and South Korean steel mills, including that of Posco’s, for the next three years.
MMTC’s five-year supply contract had expired on March 31, 2011.
