Coal India Ltd (CIL) today said it was open to utilisation of up to a fourth of its cash reserves, about Rs 15,000 crore, for purposes other than capital expenditure if asked by the government, its main shareholder.
"The government wanted to know how much cash reserves we have. We will have cash reserves of Rs 60,000 crore by March, 2012. We have also indicated to retain three-fourths of it for our development and capex requirements," CIL Chairman NC Jha said here today on the sidelines of a CII seminar.
The government had sought to ascertain the cash position of PSUs as part of efforts to explore all available options to raise money and reduce the fiscal deficit.
In this regard, it seems likely that the disinvestment target of Rs 40,000 crore for 2011-12 will not be met due to sluggish capital market conditions.
However, the Finance Ministry has asserted that it is weighing several options to meet the PSU stake sale target despite uncertainty in the stock market.
The government is considering various options, apart from the public offer route, to achieve the disinvestment target for the fiscal by way of share buy-back, private placement of shares or asking cash-rich PSUs to buy equity in their peers.
In this respect, CIL is willing to release up to Rs 15,000 crore by March, which may be used for either a share buy-back or a special dividend.
At present, CIL has close to Rs 49,000 crore of cash reserves.
Nevertheless, Jha clarified there had been no directive from the government on what it would do with the funds, only that it wanted to know the cash position.
"It is all shareholders' money and whatever interest we get from it goes into the profit and loss account. The money has to be somewhere, either for investment in business or in banks," Jha said.