LAHORE, April 16: The state-owned financial institutions have restructured non-performing loans to the tune of Rs28 billion on the recommendation and active involvement of the Corporate and Industrial Restructuring Corporation (CIRC).
This was stated by a senior CIRC official in a presentation on the performance of the corporation in the last one year organized for businessmen here at the Lahore Chamber of Commerce & Industry on Tuesday.
CIRC banking member Naeemuddin Khan stated the corporation had sent back to the banks and DFIs cases of 139 units involving non-performing loans of Rs33 billion in the last one year for a settlement with their owners because it considered those units viable projects.
He did not say as to how many of them were still operative and how many had been closed down. However, he added, the corporation gave the banks and other financial institutions 30 days for restructuring the loans of operative units and 60-90 days for the others.
He said of all the cases referred back to the lenders by the CIRC, the accounts involving Rs28 billion had already been settled and were under implementation.
He said the CIRC had assumed non-performing assets worth Rs59 billion during the first year of its operation since May 2001. He said the CIRC was left with non-performing assets of Rs21 billion for resolution after referring the cases of 139 units back to the lenders. The official did not say anything about the rest of NPAs to the tune of Rs5 billion.
The CIRC that started auctioning the units acquired by it from the financial institutions from May last year has sold 45 of them for about Rs1 billion. “It has created around 25,000 direct jobs. Besides, a sum of Rs450 million has been invested as fresh equity in these units,” Khan claimed.
He said the CIRC would assume NPAs of Rs79 billion in its next phase of operations from May this year. He stated the corporation had already helped UBL and NDFC, now merged with NBP, clean their NPAs portfolio.
Khan said several incentives for the buyers of CIRC units were under consideration. He stated that the corporation had requested the government that no questions should be asked about the source of money from the CIRC buyers in order to create confidence among them.
He said the CIRC sold assets and not companies at the “market” price. He said the corporation wanted the closed units to “become operational”. He added 60 units, 10 units per month, would be put up for sale in the next six months, starting from May.
CIRC chief Javed Hamid said the CBR had agreed to “again offer first-year depreciation to the CIRC buyers”. In answer to a query by a participant, he said the corporation was scheduled to hold a presentation for President Gen Pervez Musharraf in May where “the issue of Wapda’s insistence on recovering the electricity arrears from new buyers of the units sold by the CIRC would be raised”.