Orissa Cabinet approves restructuring of OSFC

Bhubaneswar, Dec 8 (UNI) The Cabinet meeting, chaired by Chief Minister Naveen Patnaik today approved the restructuring of the Orissa State Finance Corporation(OSFC), lying sick for the past several years with a loss of Rs.380 crore.

Briefing newspersons after the Cabinet meeting, Chief Secretary Ajit Kumar Tripathy said the government in a bid to revive the state-owned Finance Corporation decided pump Rs 254 crore as fresh capital and convert its loan amount totalling nearly Rs 40 crore as equity.

The Cabinet, he said, also cleared the deck for the OSFC to sign MoU with the SIDBI for a revival proposal and start refinancing, which was suspended since 2003 following refusal of the SIDBI to finance any more.

Mr Tripathy said the state government would pump Rs 254 crore within the next ten years to help the OSFC redeem its Rs 302 crore SLR bond (Statutory Liquidity Ratio Bond).

The Chief Secretary said of the total Rs 302 crore, the OSFC had settled the bond amount of Rs 175 crore with the 22 commercial Banks, which had agreed to waive the interest to the tune of Rs 73 crore through OTS arrangement.

The remaining SLR bond owed to SBI, Central Bank of India, Indian Bank, LIC and Provident Fund would be settled as the OSFC had approached these Banks also to waive the interest amount.

Official sources said the OSFC had an outstanding loan of Rs 180 crore from the SIDBI with an interest rate of 13 per cent but the SIDBI had agreed to reduce the interest rate to 7.5 per cent and provide fresh loan with the new reduced interest rate.

MORE UNI DP SJC MSJ DB1849