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• Amidst the rising incidents of stressed assets in the power sector, around Rs 7,000 crore loan of the Haryana State Electricity Board (SEB) has been restructured, sources in the banking industry have said. "Around Rs 7,000 crore loan of Uttar Haryana State Electricity Board has been restructured by a consortium of banks led by the Kolkata-based Uco Bank to give more time to the troubled state electricity board for repayment," a banking official told PTI here. As many as 13 banks have an exposure to this state entity, which has now been restructured, the official added. Uco Bank has around Rs 860 crore exposure to the SEB along with other banks like the Bank of Maharashtra, which has around Rs 150 crore exposure. When contacted, a spokesperson of the Uttar Haryana Bijli Vitran Nigam said, "We are in the process of restructuring some of the loan amount and are in talks with banks regarding this." "Our discussions with Uco Bank have recently concluded and they had a fgavourable view regarding this," the spokesperson added.

• Significantly, banks are happy with the CDR deal as the SEB has been made to pay back at a higher interest rate apart from securing a government guarantee to the debt. "It's a good deal, as we are getting higher interest rate with government guarantee," a bank official, who is part of the consortium of lenders said, who wished not to be named. PTI could not ascertain, whether this is hinged to a longer moratorium on repayment. Debt restructuring is a process that allows a company facing cash flow problems to reduce repayment burden by re-negotiating its debt obligation for improving liquidity condition. Recently, banks are concerned about their advances to the SEBs of Tamil Nadu, Rajasthan, Uttar Pradesh, Bihar, Haryana, Madhya Pradesh and Punjab, which, according to the rating agency- Crisil, are the most vulnerable ones.

• A recent Crisil report said, losses of discoms (distribution companies) rose 24 per cent to Rs 27,500 crore between 2006-07 and 2009-10, which could rise to Rs 35,000- 40,000 crore in 2010-11, mainly because of the problems the utilities are facing like no rise in tariffs for longer period by state governments, non-recovery of dues along with various other issues. According to Crisil estimate, the combined loss of the state-run discoms is a staggering Rs 70,000 crore last fiscal. Recently, the second largest public sector lender Punjab National Bank, which had recast Rs 2,500 crore of loans in the second quarter, had said out of this amount as much as Rs 1,800 crore were from the Tamil Nadu SEB. The bank has an exposure of over Rs 12,000 crore to the SEB. Except the issues faced by SEBs, coal linkage problems and environmental norms are also hurting the power sector. PTI DM BEN NP

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