Takru, bankers discuss stalled Maheshwar hydel project

Bankers today failed to find a way out of their troubled exposure to the stalled Maheshwar Hydel Power Project in Madhya Pradesh but hinted they might offer a corporate debt restructuring (CDR) package. The project has been stalled since 1998.

Today, Rajiv Takru, the Union government's financial services secretary, met top executives of public sector banks (PSBs) here to discuss the project. Another meeting will take place tomorrow.

Soundara Kumar, deputy managing director, stressed assets management group, State Bank of India (SBI), said: "No final solution (has been found) and ultimately we may have to go to CDR because I think it is a project which we should try and save." She said of the 10 turbines of the project, three had been installed and were ready for work.

"The issue is to support it. How do we support without hurting the banks too much and whether the banks can work out a solution on the account (is the issue)," Kumar told reporters after the meeting.

S Kumars, the textile group, already facing impending legal action on other loans, is the promoter of the. S Kumars was unable to bring its share of contribution after the exit of US-based Ogden Energy, which had 49 per cent stake. Most of the lenders to the project have classified the loan as non-performing.

SBI has an exposure of Rs 200 crore to the project. The combined exposure of all lenders is Rs 2,000 crore, said Kumar.

This was the first time the finance ministry had called a meeting to review lenders' exposure to a particular project. Asked about this, Kumar said, "The ministry is interested in the bank (as) banks are owned by the ministry...In this project, PSBs and other public sector bodies have sunk in a lot of money and they are owned by the government.

She also said it was a part of Finance Minister P Chidambaram's initiative to identify and restart stalled infrastructure projects. "This has been going on and three-four meetings have already happened," said Kumar, adding many more projects had been identified.

Asked about the possible solutions for this project, Kumar said, "Banks should help but in what manner - whether by debt or equity or take some control and put people in, get it managed through a different entity - are the decisions we will have to take now."

Possible solutions discussed today included getting fresh equity or conversion of debt into equity, after which the banks can go on to restructure the debt, said Kumar.