September 20, 2012

The government is planning to give power distribution companies the option of recasting debts to the tune of Rs. 200,000 crore.

The package, likely to be approved by the Union cabinet is aimed at enabling state governments and electricity boards to carve out a strategy for t he financial turnaround of their distribution arms.

Under the proposed plan, short-term loans worth Rs. 200,000 crore, which these companies had taken from banks, is likely to be restructured in a manner in which half of the amount would be converted into state-government bonds.

The accumulated losses of state power distribution companies are estimated to be about Rs. 190,000 crore as on March 31, 2011.