At a time when major corporate firms are struggling with cash crunch situation amidst global tight liquidity scenario and lack of free operating cash flows, India’s largest private sector company Reliance Industries boasts of $14 billion cash reserves as on second fiscal quarter ended September 30.
While Indian airline carriers are struggling to fund their normal course of businesses, the cash pile at Mukesh Ambani-owned RIL is all set to touch dizzying heights of $25 billion by March 2012, according to a media report.
The incremental cash proceeds for the petroleum refining major is likely to be funded from payment of remaining stake-sale proceeds from British energy giant BP; in accordance to completion of strategic deal by RIL to sell 30% stake in 21 oil and gas blocks to BP valued at $7.2 billion.
Moreover, recently, Reliance Industries had invested its surplus cash reserves by acquiring stakes in unconventional source of energy in form of shale gas blocks found abundantly in the US. In mid-2010, RIL had announced a JV with Atlas Energy for investment of $1.7 billion to produce gas from shale in Marcellus region.
RIL had also struck a buy out of 45% stake in shale gas assets owned by US-based Pioneer Natural resources for $1.35 billion.