After RBI warning, PSIDC prepares recovery roadmap

Ruchika M. Khanna

Tribune News Service

Chandigarh, January 29

The Punjab State Industrial Development Corporation (PSIDC) has finally prepared a roadmap for its economic revival, which will help the cash-strapped organisation retain its non-banking financial company (NBFC) status. The RBI had recently sent a notice to the PSIDC, asking why its NBFC registration should not be cancelled.

The roadmap, which includes a one-time settlement (OTS) scheme for its defaulters, securing a loan from the Punjab government and liquidating its assets, will be tabled before its Board of Directors next week.

Once okayed by the board, the roadmap will be presented to the RBI so that the corporation’s NBFC certification is now withdrawn.

Last month, the RBI had issued a notice to the PSIDC after it defaulted on the payment of Rs 270 crore against bonds it had floated earlier. The regulatory bank had asked the corporation to prepare and submit its roadmap before February 28, if it wanted to carry on its business. The default in payment is expected to swell to Rs 315 crore by March 31.

The PSIDC had floated 15 bond issues between 2001 and 2013, and raised Rs 610.92 crore as unsecured loans. The interest on these loans is Rs 94 crore and principal amount due is Rs 176 crore (till December 2014).

Official sources said the roadmap included an OTS scheme that would help raise Rs 200 crore. The roadmap will also include raising Rs 50 crore through disinvestment of Punjab Alkalies, whose bids are to be opened on February 10. The corporation also proposes to sell some of its assets and raise another Rs 85 crore.