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Debt restructuring for discoms to start from Jan: Govt

In September, the approved restructuring of Rs 1.9 lakh crore debt of state electricity boards.

Press Trust of India  |  New Delhi 

The Power Ministry will commence restructuring of loans worth Rs 1.9 lakh crore of ailing power distribution companies from January next year.

"We are on track for executing restructuring of state distribution companies. In January, (we) will issue securities for the same," Power Secretary P Uma Shankar told reporters here.

"We are hopeful of participation by several states, including Jharkhand," Shankar said.

The other states which have evinced interest in undertaking financial restructuring in the include Uttar Pradesh, Tamil Nadu, Haryana and Pun

The government, in September, approved restructuring of Rs 1.9 lakh crore debt of state electricity boards.

Under the scheme, 50% of the short-term outstanding liabilities would be taken over by state governments.

Balance 50% loans would be restructured by providing moratorium on principle and best possible terms for repayments.

As part of mandatory condition, 50% of the outstanding liabilities up to March 31, 2012 is to be taken over by the state governments. This shall be first converted into bonds to be issued by to participating lenders, duly backed by the state government's guarantee.

The support under the scheme will be available for all participating state-owned on fulfilling short-term mandatory conditions.

The restructuring or reschedulement of loans is to be accompanied by concrete and measurable actions by or states to improve the operational performance of the distribution utilities.

The takeover of liability by state governments from in the next two-five years by way of special securities and repayment and interest payment to be done by state governments till the date of takeover.

Meanwhile, Minister of State (Independent Charge) Jyotiraditya Scindia today said that the state government would provide full support to the for repayment of interest and principal for this portion.

First Published: Thu, November 22 2012. 18:46 IST