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Bankers of Ratnagiri Gas and Power (RGPPL) have agreed to restructure the Rs 7,500-crore loan the company took in 2005 to revive the Dabhol power plant. The board of RGPPL met on April 9 and approved the proposal for the financial restructuring of the loan and the proposed power tariff hike.

As per the original schedule, Ratnagiri Gas had to pay Rs 1,100 crore as principal amount and another Rs 1,491 crore in interests by the end of 2008-09. Now, its lenders — IDBI, ICICI Bank, State Bank of India and Canara Bank — have agreed that the company can make this payment by 2010 or 2011, said a company executive, who asked not to be named. The bankers are now seeking the approval of the Reserve Bank of India for the restructuring.

Confirming the development, IDBI executive director BK Batra told ET: “We expect greater flow of revenues from RGPPL in the coming months after the restructuring package is put in place.” It now waits the approval of power regulator Central Electricity Regulatory Commission (CERC) to hike the price of its electricity to Rs 2.65 per unit from Rs 1.01 per unit in the previous year. The matter would be heard on April 16.

This year, RGPPL is set to generate 7,500 million units of power over 3,873 million units in the previous year, said the official. If the proposed tariff hike is approved by CERC, it could add nearly Rs 1,596 crore more to RGPPL’s revenues.

Several setbacks, including repeated turbine failure that prevented resumption of power generation till September 2007 and limited availability of gas that forced the plant to run mostly on naphtha, stopped Ratnagiri Gas from running the plant in full capacity and ensuring a steady revenue from pipeline. Hence, the default in loan repayment.

The plant produces only 660 mw of electricity, while the total capacity of the three units is 2,150 mw. It targets to touch 1,900 mw in this year. The company is expected to sign a comprehensive service agreement for maintenance and repairs of turbines with General Electric (GE) in the next weeks. It has also sought Rs 300-crore loan from PFC to buy spares for the plants, the executive said.

Ratnagiri Gas is also set to get gas from Reliance Industries’ Krishna-Godavari block within a couple of months, while its contract with Petronet LNG expires by September, the company executive said.

Source - Economic Times