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The power ministry has said that four states have so far restructured their short-term liabilities of around Rs 43,000 crore as part of the centre’s Financial restructuring Package (FRP) for ailing power distribution companies.
“We had identified seven states as focus states for the debt restructuring plan. Of these, short-term liabilities of around Rs 43,000 crore of four states have already been taken over. This includes Haryana, UP, Rajasthan and Tamil Nadu,” power ministry’s Additional Secretary Ashok Lavasa said. He added the states have agreed on the terms of restructuring now and are in dialogue with financial institutions on the issuance of bonds.
The government had in September last year announced the FRP to settle the 1.9 lakh crore debt liability of state distribution companies. Under the plan, half of the short-term liabilities are to be taken over by state governments.
These will be first converted into bonds to be issued by discoms to participating lenders duly backed by state governments’ guarantee. The other half of the debt liability is to be restructured by providing moratorium on principal and best possible terms for repayments.
Seven major defaulting states together have a total outstanding liability of 1.2 lakh crore, accounting for a bulk of the total. Half of this or Rs 59,813 crore is to be taken over by state governments through bonds. This includes Rajasthan’s Rs 19,855 crore, Uttar Pradesh’s Rs 12,967 crore, Tamilnadu’s Rs 9,573 crore, Haryana’s Rs 7,859 crore, Punjab’s Rs 5,823 crore, Andhra Pradesh’s Rs 3,151 crore and Madhya Pradesh’s Rs 585 crore.
