US power major, AES has submitted a formal proposal to shed its 51 per cent stake in the Central Electric Supply Company, one of the four power distribution companies in Orissa, reports CNBC India.

This follows the inconclusive talks between AES president, Dennis Bakke and the state government.

AES said that it was impossible to run the business in the present condition. It also said that there were deep-rooted flaws in the regulatory policy and administrative environment in the state.

AES said the state government was not focusing on any long-term solutions to the problems and was speeding up the eventual collapse of the system. AES has been demanding the payment of arrears of Rs 160 crore