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Only 6 banks respond Rs. 600 crores loan call by Powercom
PATIALA: Only six banks have responded on the first call of Punjab State power corporation limited (POWERCOM) earlier PSEB to give loans to the cash strapped state’s new power corporation.
##ad_1##Powercom has called all banks to give quotations for Rs. 600 crores loan. The public sector banks were reluctant in giving loans as PSEB bifurcated in two companies.
Sources said here that the total worth of PSEB has been evaluated at Rs 30,000 crore and final valuation would be available after six months. All the assets of PSEB would be shifted to Powercom. An external liability of loan of Rs 14,000 crore would also be shifted to the new company.
Out of Rs. 14000 crores the liabilities towards public sector banks were over Rs. 5000 crores. The central Bank of India & Canara Bank have major share of it.
The oriental Bank of Commerce has given 200 crores to Powercom at the interest rate of 8.49 percent while Vijaya bank has given advance in the tune of Rs. 250 crores @ 8.5%. The negotiations were on to two other banks- Bank of India & Union Bank of India- who have given 9 percent as rate of interest.
The proposals for two other banks –Corporation & Canara- have been rejected as they have given 10 percent as the rate of interest.
The other reasons for banks have not responded the call as CRISIL, credit rating agency, has given high risk rating-PR-4- for erstwhile PSEB and has not yet given any fresh rating for newly formed Powercom, said sources.
The rating is constrained by the weak financial performance, high level of cross subsidization, increasing dependence on power purchase, high T& D losses, stagnant capacities, increased debt levels and limited progress in implementing the reforms in the power sector in the state. Moreover, the rating is constrained by the limited financial flexibility of the state government, as reflected by the high level of committed expenditure and the elevated outstanding liabilities of the state.
The Powercom has sought the medium-term loan, having tenure of three years, is proposed to be used to meet working-capital requirements, while short-term loan is intended to be deployed for making payments towards purchase of power, coal and freight to railway and the tenure of loan would be one year, sources added.
##ad_1##Powercom has called all banks to give quotations for Rs. 600 crores loan. The public sector banks were reluctant in giving loans as PSEB bifurcated in two companies.
Sources said here that the total worth of PSEB has been evaluated at Rs 30,000 crore and final valuation would be available after six months. All the assets of PSEB would be shifted to Powercom. An external liability of loan of Rs 14,000 crore would also be shifted to the new company.
Out of Rs. 14000 crores the liabilities towards public sector banks were over Rs. 5000 crores. The central Bank of India & Canara Bank have major share of it.
The oriental Bank of Commerce has given 200 crores to Powercom at the interest rate of 8.49 percent while Vijaya bank has given advance in the tune of Rs. 250 crores @ 8.5%. The negotiations were on to two other banks- Bank of India & Union Bank of India- who have given 9 percent as rate of interest.
The proposals for two other banks –Corporation & Canara- have been rejected as they have given 10 percent as the rate of interest.
The other reasons for banks have not responded the call as CRISIL, credit rating agency, has given high risk rating-PR-4- for erstwhile PSEB and has not yet given any fresh rating for newly formed Powercom, said sources.
The rating is constrained by the weak financial performance, high level of cross subsidization, increasing dependence on power purchase, high T& D losses, stagnant capacities, increased debt levels and limited progress in implementing the reforms in the power sector in the state. Moreover, the rating is constrained by the limited financial flexibility of the state government, as reflected by the high level of committed expenditure and the elevated outstanding liabilities of the state.
The Powercom has sought the medium-term loan, having tenure of three years, is proposed to be used to meet working-capital requirements, while short-term loan is intended to be deployed for making payments towards purchase of power, coal and freight to railway and the tenure of loan would be one year, sources added.
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