In most cases, Life Insurance Corporation, Power Finance Corporation
and Rural Electrification Corporation (REC) are not giving consent to debt-restructuring proposals.
The Supreme Court
will hear the petition filed by the Power Producers’ Association in January against the circular. All petitions against the circular pending in high courts are combined with the power producers’ petition.
Electricity producers are worried that lack of debt
restructuring will lead to 70-80 power companies
started cleaning up bad debts of banks in June last year when it sent the first batch of 12 large companies
to the NCLT for debt
resolution. The haircut to be taken by lenders on these companies, on average, is around 50 per cent.
(With inputs from Sohini Das)