Merchant bankers decline to help CIL with due diligence

Kolkata: Coal India’s foreign acquisitions plan has hit a roadblock with all top merchant bankers refusing to offer consultancy or carry out due-diligence of assets shortlisted by the firm.

This is likely to delay the company’s foreign ventures since it will now have to look for second rung bankers ready to offer services to the coal sector.

“Coal is increasingly being considered a dirty fuel that adds to greenhouse effects and global warming,” a Coal India executive said. “It prompted large financial groups to exit the sector following heavy pressure from environment groups. This is likely to inordinately delay foreign ventures since it will now have to search for second rung regional bankers who would be ready to offer consultancy despite global pressure…”

Last year, Coal India had identified six potential coking and semi-coking coal assets, two each in Australia, Canada and Russia. According to a memorandum of understanding with the coal ministry, Coal India was to submit binding bids for acquiring stakes in assets in Australia and Canada by March 2020.

“This might not be possible now,” the executive said.


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