DVC in talks with banks to restructure Rs.30,000 crore debt burden

Public sector undertaking Damodar Valley Corporation (DVC) on Friday said it is in talks with banks and other financial institutions to restructure its Rs.30,000 crore debt burden while it has plans to raise additional funds through the bond market.

"We have plans to raise additional funds through the bond market at low interest rates to service our existing interest and also retire some of our high cost debts in a bid to lighten our debt burden," company chairman, Andrew W. K. Langstieh told media persons here.

He said DVC is presently spending about Rs.1,200 crore every year as interest on its existing debt which was taken to set up additional capacities to the tune of nearly 5,000 MW.

"We are planning to increase the tenure of the existing loan till the life of the plant and are in talks with financial institutes to avail the debt restructuring scheme of floated by Reserve Bank of India," he said.

The company is also facing challenges to sell power from its plants which are under construction as well as payment default problems as consumers are not paying up the dues at proper time.

"We are in talks with the Jharkhand government for a financial restructuring package so that the dues can be settled. Nevertheless, the state has been clearing its recent dues regularly," he said.

Jharkhand's dues to DVC until March 2013 stand at nearly Rs 4,300 crore.

Langstieh said although the company had underwent a Rs.1,050 crore loss during 2013-14, it is optimistic about selling 700 MW of additional power to south India through the southern grid from which it hopes to earn around Rs.3,600 crore additionally.

From West Bengal, an additional Rs.360 crore is also expected on account of a recent tariff revision here.

However, it will be losing income from around 400 MW of power sales to Delhi as the government has recently decided to surrender about 2,500 MW of power.

"We have set up a marketing team which is trying to sign short terms power purchase agreements to make sure that idle capacity can be utilised to generate revenue. This team has recently managed to sign a 75 MW power purchase agreement with Assam," Langstieh said.

DVC has an installed capacity of 6,357 MW of which around 1,500 MW is remaining idle.