Post-privatisation equity increase challenge: CCoP seeks alternative to CDF arrangements
ISLAMABAD: The Cabinet Committee on Privatisation (CCoP) has directed the Power Division and Finance Division to devise an alternative to the Circular Debt Financing (CDF) arrangement to avoid an increase in the Government of Pakistan’s (GoP) equity through repayment of loans after privatisation, well-informed sources told Business Recorder . The directions were issued while approving the…
The Cabinet Committee on Privatisation (CCoP) has directed the Power Division and Finance Division to devise an alternative to the Circular Debt Financing (CDF) arrangement to prevent an increase in the Government of Pakistan’s (GoP) equity through loan repayments after privatisation. The decision comes in the context of the transaction structure for three power distribution companies—FESCO, GEPCO, and IESCO—following the approval of their restructuring plan.
The plan includes carving out the retirement benefits of retired employees into a single GoP-owned Special Purpose Vehicle (SPV) for all DISCOs and entering into long-term lease-back arrangements for all land. The CCoP also decided to write off the overdue portion of Development Support Loan (DSL) re-lent loans, including accrued mark-up, while keeping the non-due portion on the DISCOs’ balance sheets.
Brief written by urgent.news from Business Recorder's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
