Coal India Ltd (CIL) has no plans for long-term borrowing by issuing bonds even though its outstanding contributions from the power sector have already crossed Rs 18,000 crore, an official said on Tuesday.
The fees are likely to be more than Rs 20,000 crore by the end of June, he said.
The outstanding fees began to rise from the last fiscal period, as the power sector was reeling under crisis, and the Maharatna PSU continued to push coal after the government asked the miner to step up 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.
Previously, CIL had said that it continues to face high demand for coal, with most of its customers, like power producers, shying away from raising 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 percent 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 a 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 Rs 18,600 crore by the end of May.
Customers sought relief from distribution companies during the lockdown, and it was difficult for them to pay off power generators, the official said , adding that this led to a problem of low realization 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.
