Govt financial security to MP PSU

Despite poor performances of state public sector undertakings (PSU), the state government has decided to provide security to another company in anticipation that the company will boost entrepreneurship and venture into real-estate sector.

Indore-based Madhya Pradesh Finance Corporation (MPFC) has been given Rs 100 crore against a Hudco loan and privately placed bonds of Rs 50 crore each. The MPFC has to repay the loan at 9.75 per cent in eight years. “The corporation will be able to raise funds to promote commercial activities and will also be able to enter into housing sector. The state cabinet has decided to give security of Rs 100 crore for each of its proposals,” a government spokesperson said.

The Hudco will also issue privately placed bonds at 8.50 per cent to 9 per cent, payable in ten years. The state has powers to provide security cover to entities under State security Act 1976.