The Indian Government has appointed seven banks to oversee Coal India's 5% stake sale process, which is expected to raise $1.2bn, amid protests from unions.
The banks comprise Goldman Sachs, Bank of America Merrill Lynch, Deutsche Bank, Credit Suisse and Indian investment banks SBI Capital, JM Financial and Kotak Mahindra Capital.
Sources familiar with the sale process were quoted by Reuters as saying that the sale is part of the 'state sell-off programme' to raise Rs400bn ($5.87bn) in the fiscal year ending March 2014, in a move to fill the current account deficit and prevent downgrade ratings.
The sale was announced earlier this month and is expected to be launched in October, the sources added.
India intends to sell the stake in the coal miner through a follow-on offer to private firms.
Leaders of five trade unions, representing more than 90% of the company's 383,000 workforce, claim that the follow-on offer was a breach of government assurance.
All India Coal Workers' Federation general secretary Jibon Roy told the news agency that the decision will further exacerbate the situation.
"The government has to withdraw this move," Roy said. "Whatever be the decision that the government takes, workers will not allow privatisation.".
The government-owned company meets more than 80% of the coal requirements of the local market.
Initial talks held in July between Coal India and the trade unions failed, despite the plan to divest the stake was reduced to 5% from the earlier proposal of 10%, which could raise around $300m.
During its negotiations with the CIL management and government, the trade unions reiterated that they were assured during the initial public offer (IPO) of CIL shares in 2010 that no further equity will be sold.
Image: CIL meets more than 80% of the coal requirements of the local market. Photo:dan/freedigitalphotos.net.