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Discoms’ debt recast scheme deadline may be extended

An inter-ministerial panel will meet on Friday to mull extending the deadline for the government's ambitious debt recast scheme to 30 June for the beleaguered power distribution companies.

'The secretaries from all the ministries are meeting on 5 April,' Power Secretary P Uma Shankar told reporters on the sidelines of an event here. When asked whether extending the date to 30 June for the financial restructuring package be on the agenda, he said: 'We will discuss it.'

The last date for availing the scheme for the states was 31 December 2012, but so far only eight states, including Bihar, Andhra Pradesh, Uttar Pradesh, Tamil Nadu, Kerala and Haryana, have come on board for the plan.

Under the scheme approved by the Cabinet Committee on Economic Affairs, 50 per cent of the short-term outstanding liabilities would be taken over by state governments.  The remaining 50 per cent loans would be restructured by providing moratorium on principal and best possible terms for repayments.

As part of the mandatory condition, 50 per cent of the outstanding liabilities up to 31 March 2012 are to be taken over by the state governments. This shall be first converted into bonds to be issued by power distribtuion companies to participating lenders, duly backed by the state government's guarantee. The support under the scheme will be available for all participating state-owned discoms on fulfilling short-term mandatory conditions.

The takeover of liability by the  state governments from power  distribution companies  in the next two-five years by way of special securities and repayment and interest payment to be done by state governments till the date of takeover.

The accumulated losses of the state power distribution companies (Discoms) are estimated to be about Rs 1.9 lakh crore as on 31st March, 2011.
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