Mumbai: State run-Power Finance Corporation (PFCNSE 0.58 %) has reversed provisioning worth Rs 870 crore in FY19 and expects more write-backs in the coming quarters as asset quality improves.
“There’s no further stress on existing assets. We have been saying that the worst is over but this is the first time in the last three years that we have undertaken reversal of provisions. We expect more reversal of provisioning in the coming quarters as the issue of stressed assets gets resolved,” ..
In the quarter ended March, the company reversed provisioning of Rs 500 crore, including which the total for the year FY19 stands at Rs 870 crore. PFC has been making provisions for potential bad loans in the past few years as power generation companies, reeling under the pressure of huge debt, low utility and other issues, have been curbing their operations.
PFC said the resolution of the first of its stressed assets, GVK’s Ratle Hydroelectric project, has been completed and the loan has been upgraded from non-performing asset (NPA) to standard asset. It expects to do the same for some other projects as well. “Developers of three projects have given us an offer for settlement of principle, we are at an advanced stage of discussions with them. We also expect some other stressed assets to get resolved outside of NCLT,” said Gupta.
The three p ..
After the Supreme Court struck down the Reserve Bank of India’s February 12, 2018, circular on stressed assets, NCLT petitions for three projects, where PFC was one of the lenders, have been withdrawn.
The company has a total exposure of Rs 8,000 crore these three projects — Rattan India Amravati, Rattan India Nasik and KSK Mahanadi. “We hope to resolve it outside of NCLT, and are engaging with other public sector enterprises such as NHPC and NEEPC potential investment,” Gupta said.
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