PFC aims for Rs 8 billion provision write-back from govt projects

State-run Power Finance Corporation is aiming to get a provision write-back of over Rs 8 billion through upgradation of distressed government assets in the current financial year, a top company official said.

Out of the total government loans as on March 31, 2018, nearly 89 per cent or Rs 2.03 trillion are standard assets, nine per cent or Rs 191.67 billion are restructured standard assets and two per cent or Rs 50.16 billion is NPA.

"There are no stressed government projects. There may be issues with a few, but then they are regularly servicing the debt," PFC chairman and managing director Rajeev Sharma told reporters here on Thursday.

The company plans to upgrade Rs 120 billion worth of restructured assets to standard assets in 2018-19, while out of the Rs 50.16 billion NPA, it aims to upgrade nearly Rs 46 billion this fiscal, he said.

"For upgradation of NPAs, we expect a reversal of Rs 2.3 billion, while for the restructured assets, we expect a reversal of Rs 6 billion," he added.

During the March quarter, the company managed to decrease the restructured assets by 53 per cent to Rs 191.67 billion, compared with Rs 408.52 billion in the previous quarter.

Loans worth Rs 219.63 billion were upgraded to the standard category as they achieved the date of commencement of commercial operations, he said.

Similarly, nearly 20 per cent of government NPAs were reduced in the March quarter to Rs 50.16 billion, from the December quarter last year.

In terms of private players, the company has stressed loans worth Rs 310 billion.

"We have undertaken various resolution plans which are under process. There are four projects with an exposure of Rs 43 billion which are in advanced stage of resolution, and we don't expect major haircut in them," he said.

Sharma further said four other projects with exposure of Rs 63 billion are under bidding for change of management, while it is in talks with the Maharashtra government to take over one of the asset of Rattan India in Nashik, which has an exposure of Rs 30 billion.

"We are getting good response for our bids as the players participating are well established. We believe this trend will continue as there is a lot of capacity that may come up on block and there are many serious players who are keenly looking at such projects," he added.

Nearly nine projects, with exposure to the extent of Rs 81 billion, are being resolved through NCLT, and resolution plans for six projects (with Rs 87 billion exposure) are under finalisation, according to Sharma.

PFC is also planning to realign its lending portfolio to diversify into new areas including railway electrification, smart cities infrastructure, e-vehicle charging stations and battery manufacturing units for solar projects.