CCEA may take up amendments to debt rejig package today

NEW DELHI: Cabinet Committee on Economic Affairs is likely to take up the Power Ministry's proposal of tweaking the financial restructuring package for distribution companies today.

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

According to a Power Ministry official, the proposal may be taken up in today's meeting of the CCEA.

Jharkhand, Bihar and Andhra Pradesh had approached the Ministry seeking this special provision.

Under the current Financial Restructuring Package (FRP), which was approved by the government last year, 50 per cent of the accumulated debt of the discoms till March 2012 can be converted into bonds.

These bonds will be issued by the distribution companies to the participating lenders, backed by state government guarantees.

The balance 50 per cent loans will be restructured by providing moratorium on principal and best possible terms for repayments.

The support under the scheme is available for all participating state-owned discoms on fulfilling short-term mandatory conditions.

The accumulated losses of state power distribution companies were estimated to be about Rs 1.9 lakh crore as on March 31, 2011 and Rs 2.46 lakh crore as on March 31, 2012.