SBI, lenders to meet this week to discuss recast of distressed power plants; aim to restructure debt worth Rs 1.77 lakh cr
The country's largest lender SBI is reportedly preparing a debt restructuring and take over for stressed power assets in order to attract new owners
The country's largest lender, the State Bank of India (SBI), will reportedly work with other lenders to figure out a way to either sell or lease-out stressed power assets.
Together, the lenders are trying to restructure the debt of 34 thermal power projects under stress -- and saddled with debt worth Rs 1.77 lakh crore -- in a bid to offload them, or lease them out, to the Mumbai-traded thermal power major NTPC Ltd, or to private players, according to The Economic Times.
The SBI will host a meeting of all power plant lenders in Mumbai on Wednesday. “The proposal is at a very nascent stage. But if it is agreed upon, it will be beneficial to lenders as well as promoters. It will be less time consuming and the assets will get better valuation than if they go into liquidation,” an unnamed government official was quoted as saying by the newspaper.
The SBI proposal involves getting a power plant's debt rated by credit rating agencies, followed by a valuation of power plants, some of which are under construction. The plants will then be offered to the National Investment Fund (NIF), which will then invite bidders, said the newspaper.
Sunil Srivastava, Deputy MD of SBI, in an interview with CNBC-TV18, had said that power is a stressed sector for the entire banking sector. “Addressing these issues in a short possible time of six months is going to be very-very difficult,” Srivastava told the news channel.
SBI wrote-off bad loans worth Rs 20,339 crore in fiscal 2016-17, the highest among all the public sector banks, which had a collective write-off of Rs 81,683 crore for the fiscal.
With inputs from PTI
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