SHILLONG: As the cash flow gap of the Meghalaya Energy Corporation (MeECL) stands at a whopping Rs 287 crores for the financial year of 2017-18, the Corporation will now be raising its bond to the tune of Rs 800 crores for its financial restructuring
Speaking to media persons here on Friday after the Cabinet meeting, Chief Minister, Mukul Sangma said that the Corporation now requires Government guarantee to extend the bond and Government has already extended its guarantee to the corporation for the purpose.
Sangma pointed out that the total bank guarantee extended to the corporation as on date is Rs 1174 crores and out of the amount, the MeECL would release 595.64 crores.
The State Cabinet approved the proposal of the Corporation to raise the bond with a condition that the bond should be floated through a national competitive bidding.
The amount raised through the bond will be utilised for dealing with outstanding loans.
“In other words, we can say that this is an exercise to have financial restructuring of the corporation to reduce the burden on interest repayment in years to come by enabling MeECL to liquidate those outstanding which has higher interest besides minimizing the interest burden,” Chief Minister told reporters.
The bond period will be for thirty years and the Government is expecting of saving a substantial amount of money annually.
“The interest saving is expected to be around 24-25 crores,” Sangma said.