Telcom, Infra and Power Sector Loans - Corporates may have over-leveraged loans

Govt Seeks Data on Loans to Telecom, Infra, Power

Move follows govt’s fear that some corporates could be over-leveraged in these sectors

Concerned that some corporates are over-leveraged, the government has asked banks to provide data on borrowings in telecom, aviation and power sectors. Interestingly, all the three sectors for which the finance ministry has sought information are in the middle of some kind of political or financial crisis. The government wants the data within a week.

The ministry has sought information on the loan sanctioning date, loan types, amount sanctioned and disbursed and stressed loans. It has also asked for information on state power utilities, which are reeling under distribution losses and mounting coal prices.

The government might use the statistical information on aviation to gauge problems faced by the sector, particularly by national carrier Air India, which is struggling to pay staff salaries and repay bank debts, bankers said. Air India has more than . 45,000-crore debt on its books. It has urged for capital from the government, even as it recently received equity capital of . 1,200 crore. Bankers said information on power sector is sought due to complaints received by the government that several corporates have not been allocated coal for setting up power projects. “Since they were not able to establish coal linkages, financial closure was being delayed, and therefore, the government may be keen on knowing the extent to which banks have sanctioned loans to them but not disbursed it,” said the general manager of a bank. Banks’ exposure to power sector stood at . 292,342 crore till mid-June, up 40% from a year earlier.

Meanwhile, the telecom sector is in the glare after the spectrum allocation scam. Almost all telecom companies have pledged their licences with banks to raise resources.

“The government may want to know to what extent banks are vulnerable to the developments taking place in the telecom sector, considering reports that the licence of some companies may be recalled, ”said a senior banker from a staterun lender. Banks’ exposure to the sector was  94,319 crore until mid-June, up 17% from a year ago.

Separately, the ministry has also asked lenders if their inability to provide debt funding to infrastructure projects is hindering IIFCL from contributing its equity in projects. 

Source: ET 13082011