Cash-rich CIL offers to lend Rs15,000-crore to government
22 November 2011
Coal India Ltd, sitting on a cash pile of Rs45,000 crore, has offered to provide up to Rs15,000 crore, to help the government reduce its ballooning fiscal deficit, in return for an 'assured' return, on a par with its existing interest income from the reserves.
CIL has projected its cash reserves to rise to Rs60,000 crore as of March 2012.
''The government had recently wanted to know about our cash reserves position. We will have reserves of about Rs60,000 crore by March 2012. We have indicated that we will require three-fourths of it to meet capex requirements,'' N C Jha, chairman of Coal India, said.
He was talking to newspersons on the sidelines of a seminar organised by the Confederation of Indian Industry today.
CIL earned an interest income of nearly Rs1,800 crore in the July-September 2011 quarter from a cash reserve of Rs45,000 crore.
Nearly 70 per cent of the mining giant's profit during the quarter came from interest income.
With chances of meeting the disinvestment target through public offer dim with market going downhill, the government hopes to dip into the reserves of cash-rich PSUs to beat the economic blues.
The proposals include options of share buyback by PSUs or encouraging PSUs to pick up stake in loss-making or smaller PSUs in order to release much-needed cash.
The government, however, is yet to respond to CIL's offer, nor has it issued any directive on possible use of such funds.