Latest News | No Plan for Bond Issue Despite Dues from Power Firms Crossing Rs 18,000cr: CIL Official

Kolkata, Jun 23 (PTI) Coal India Ltd (CIL) has no plan to go for long term borrowing by issuing bonds even though its outstanding dues from the power sector have already crossed Rs 18,000 crore, an official said on Tuesday.

The dues are likely to be more than Rs 20,000 crore by end of June, he said.

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The outstanding dues started to climb from the last fiscal as the power sector has been reeling under crisis and the Maharatna PSU continued to push coal after the government asked the miner to ramp up its production and dispatch, he said.

"Low realisation is a short-term issue. Coal India does not have any plan for long term borrowing through instruments like issuing of bonds," a top company official told PTI on condition of anonymity.

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CIL had earlier said it continues to face tepid demand for coal, with most of its customers, like the power producers, shying away from lifting adequate quantities.

"We had permitted subsidiaries to enhance their working capital limit and allowed them to borrow money from banks to tide over the crisis," the official said.

The power sector accounts for close to 80 per cent of Coal India's total supplies.

"The problem of cash flow is severe with some of the subsidiaries like Bharat Coking Coal Ltd, Western Coalfields and Central Coalfields Ltd. They are facing liquidity crunch to fulfil their statutory obligations like payment of salaries in the wake of the low realisation," the official said.

The outstanding dues rose from Rs 12,400 crore in January 2020 to around Rs 18,600 crore by the end of May.

Customers had sought relief from distribution companies during the lockdown and the discoms have found it difficult to pay power generators, the official said, adding that this led to a problem of low realisation for power producers.

"The majority of Coal India's outstanding dues are with state-owned generating companies. The miner is banking on the recovery of the economy with easing of the lockdown restrictions and the relief package announced by the Centre to the power sector," the official added.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)