Lanco Infratech, the holding company for the Lanco group, has initiated talks with bankers for restructuring of Rs 9,000-crore of its debt - Rs 4,000-crore fund-based exposure and Rs 5,000-crore non-fund-based.
Confirming the development, Lanco Infratech Senior Vice-President A Narasimhan said the exercise was in view of the current tough economic situation facing the infrastructure sector. The discussions were for Lanco Infratech as a standalone entity.
The Delhi-based company's top brass is known to be in Mumbai, engaged in meetings with bankers.
Major public-sector lenders, as well as private and foreign banks & finance firms have exposure to the company.
"We had told the company that something needed to be done about the huge debt, as it had exhausted all its options. Against this backdrop, discussions for corporate debt restructuring (CDR) have begun," said a senior official of a public-sector bank. He, however, clarified this was just the initial step in a complex task.
Another senior executive of a state-run bank said the infrastructure & construction sector was facing stress due to several factors, including a delay in fuel linkages, regulatory delays, etc.
The present move has come after the firm's multiple attempts to monetise its businesses failed. Earlier, it had tried to sell stake in its power business, as well as individual assets like Amarkantal, Baband and Anpara power plants.
The infrastructure major, with interests in roads, EPC (engineering, procurement and construction) and solar businesses, has been under stress on account of its power business.
Its total outstanding receivables from various state electricity boards (SEBs) stands at Rs 2,972 crore. Many SEBs have been under financial pressure and have been delaying payments to power generators.
The Lanco group's total debt as on March 31 stood at around Rs 33,593 crore. Some infra & construction companies that took the CDR route include Hindustan Construction Company and Gammon India.