New Delhi, Mar 12: Public sector Power Finance Corporation (PFC) has been forced to delve into its reserves to meet disbursal obligations in the wake of its failure to mop up about Rs 800 crore from the domestic and global markets.``We are trying to raise money from alternative sources, besides using our reserves as a short-term measure,'' the PFC chairman Uddesh Kohli said, while admitting that the proposed Rs 225-crore taxable bond issue had been deferred till early 1998-99.
Moreover, the corporation was also unable to raise about Rs 550 crore through external commercial borrowings (ECBs) in view of the difficult market conditions prevailing worldwide, Kohli said.
PFC was targeting a total of Rs 1,300 crore from the markets, including Rs 900 crore from overseas and Rs 400 crore from the domestic markets for attaining its internal disbursal target of Rs 2,000 crore.
Kohli said the market setback had not put the corporation in a financial crisis as ``we are now using the reserves meant for our bond redemptions (expected in July), apart from our internal resources.''
So far, the corporation has raised Rs 175 crore through the private placement of tax-free bonds domestically and another $100 million through the ECB route.
The corporation had already fulfilled its commitment to the government of disbursing Rs 1,500 crore in 1997-98 by February itself, Kohli said.
Declining to give details of PFC's alternative sources of resource mobilisation, he said the corporation would need a fund-line of another Rs 300 crore in the remaining part of the month for ensuring the internal disbursal target of Rs 2,000 crore.
Explaining the reasons for deferment of the taxable bonds, Kohli said following the Reserve Bank of India's recent measures to prop up the rupee through a two percentage point hike in interest rates, the borrowings had become a costlier proposition.
``We were about to hit the market when this thing came. But, we did not want to borrow at a higher rate of interest as it would have made our lending costlier. We are perhaps the only financial institution not to have hiked interest rates after the RBI move,'' Kohli claimed.
The profit-making corporation usually keeps three months estimated disbursals as its reserves besides gradually building up its corpus for redemption of its earlier bonds.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
