SHILLONG: As the cash flow gap of the Meghalaya Energy Corporation Limited (MeECL) stands at a whopping Rs 287 crore for the financial year 2017-18, the corporation would now be raising its bond to the tune of Rs 800 crore 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.
However, the government has already extended its guarantee to the corporation.
Sangma pointed out that the total bank guarantee extended to the corporation as on date is Rs 1174 crore and out of the amount, the MeECL would release Rs 595.64 crore. 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. With the bond of Rs 800 crore, it would also be utilized 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 loans which has higher interest besides minimizing the interest burden” the chief minister said.
The bond period will be for 30 years and the government is expecting to save a substantial amount of money annually.
“The interest saving is expected to be around 24-25 crore,” Sangma added.
