Thursday 20 September 2012
State electricity boards' 50% debt to be recast in bailout
The Union Cabinet is scheduled to consider a bailout package for ailing power distribution companies (discoms) as they. The package proposes stringent conditions for the states and discoms for being eligible for this package.
The extensive and detailed proposal spreads over almost 150 pages odd. Sources say that according to the proposal, 50% loans will be taken over by the states, the other 50% to be rescheduled by the lenders. One of the key details in the proposal is the three year transitional finance mechanism (TFM) which essentially is means the package will fund the operational losses of the state electricity boards whose loans, short-term liabilities are going to be restructured.
The extensive and detailed proposal spreads over almost 150 pages odd. Sources say that according to the proposal, 50% loans will be taken over by the states, the other 50% to be rescheduled by the lenders. One of the key details in the proposal is the three year transitional finance mechanism (TFM) which essentially is means the package will fund the operational losses of the state electricity boards whose loans, short-term liabilities are going to be restructured.
