Debt plan may be sent to IMF

An arm of the Special Investment Facilitation Council (SIFC) has given directive to seek approval of the International Monetary Fund (IMF) for the settlement of energy sector circular debt of Rs1.27 trillion amid the Ministry of Finance’s refusal to provide Rs745 billion for cash injection in the short term. The net impact on budget of the Rs1.27 trillion circular debt plan will come to Rs902 billion. Out of the Rs902 billion, the lion’s share of Rs556 billion, or 62%, will go to one firm – Oil and Gas Development Company Limited (OGDCL). The company’s share price dropped Rs10.6, or 7.24%, and closed at Rs135.31 on Thursday. Of the debt settlement plan of Rs1.27 trillion, it is proposed to retire a little over Rs1 trillion of the gas sector circular debt, involving companies listed at the stock market and leaving a major impact on their share prices. The remaining over Rs250 billion will be spent on curtailing the power sector circular debt of Rs2.7 trillion.