Kondapalli plant to add to Lanco's cash flow

Group looking for additional debt to meet cost overruns

Lanco Infratech (LITL) will be able to generate 2.8 billion units of power during September 2016-March 2017 from its Kondapalli plant, as it has been allocated 3.11 million standard cubic metres a day of gas under reverse e-auction organised by the power ministry for stranded gas-based generation capacity.

The company, which declared its financial performance for the quarter ended June 30, 2016, on Saturday, is also looking for disbursement of debt from its lenders by September-end to meet its additional interest expense due to delay in project execution, T Adi Babu, chief financial officer, Lanco, told Business Standard.

He said the consolidated debt for the group stood at Rs 37,000 crore as on June 30, 2016, which is likely to go up once the lenders approve additional funds. The current maturities of long-term borrowings amount to Rs 3,030.88 crore.

Under the approved CDR (corporate debt restructuring) scheme, the company was looking to dispose of more assets, Babu said. Additional funding to the company and the lenders’ approvals of the cost overrun proposals for the projects under construction, and the effort to bring strategic investors and disposal of assets would also bring in additional cash flows into the system.

The company reported cash loss of Rs 45 crore in April-June 2016 against Rs 1.95 crore last year. Since the result for the quarter ended June 30, 2016, are in compliance with Ind-AS notified by the ministry of corporate affairs, it restated results for the quarter ended June 30, 2015, to comply with Ind-AS to make them comparable.

Its gross revenue before eliminations increased by 19 per cent to Rs 1,984 crore in the quarter ending June 30, 2016, from Rs 1,664 crore last year. As of June 30, 2016, the group has receivables aggregating Rs 1,793.40 crore from various state electricity utility companies and other customers for sale of power.

The company said assets were not generating envisaged revenues on account of various factors beyond its control, “such as short supply of gas, pending tariff clarity and part payments from the customers is posing challenges for meeting the cash flow needs”.
POWER POINTERS

• Lanco Infratech can generate 2.8 billion units of power during Sept 2016-Mar 2017 from Kondapalli plant after allocations under reverse e-auctions
  

 

Consolidated debt for group is Rs 37,000 crore as of June 30, 2016
 

Additional funding, lenders’ approvals of cost overrun proposals for projects, effort to bring strategic investors and disposal of assets would bring in additional cash flows
 

Lanco reported cash loss of Rs 45 crore in April-June 2016 against Rs 1.95 crore last year