Cabinet nod for amending discoms debt restructuring package

The Cabinet Committee on Economic Affairs (CCEA) Thursday approved amending the debt restructuring package for state electricity distribution companies (discoms).

"The Cabinet Committee on Economic Affairs has approved amendments to the scheme for financial restructuring of state distribution companies which had been approved by the CCEA on Sep 24, 2012 to enable the financial turnaround of the state distribution companies for their long term viability," said a power ministry statement here.

As part of the amendment to the debt restructuring package, the state electricity boards of Jharkhand, Bihar and Andhra Pradesh would be allowed to convert their outstanding loans till March 2013 into bonds.

"To enable these three states for participation under the scheme, the cutoff date for reckoning the eligible amount of short term liabilities for issuance of bonds/reschedulement by lenders is now shifted to March 31,2013 from March 31, 2012 (for these three states only)," the statement added.

These states had approached the power ministry seeking this special provision to extend the date by a year.

Under the current package approved last year, 50 percent of the accumulated debt of the discoms till March 2012 can be converted into bonds. The balance 50 per cent loans will be restructured by providing a moratorium on principal and best possible terms for repayments.

The accumulated losses of discoms were estimated to be around Rs.246,000 crore as on March 31, 2012.