Lanco Infratech to sell 1,200-mw Anpara power project after restructure nod

The debt-laden Lanco Infratech Limited is looking to sell 1,200 mw coal-fired Anpara Power plant in Uttar Pradesh to bring in additional equity required to complete the under-construction power plants totalling 4,000 mw, a senior company official said on Tuesday.

The company expects to get as much as Rs 1,600 crore from the sale of this asset at an enterprise value of Rs 5,300 crore. Lanco will kick start the sale of Anpara project after the lenders' consortium, led by IDBI, gives final nod for the restructuring scheme submitted by the company.

As per this proposal, the company will transfer 1,800 mw of operational thermal power assets, including the 1,200-mw Anpara plant, as well as 4,000 mw of unfinished thermal power projects along with a debt of over Rs 35,000 crore to a new power holding company with a new management in place. This new SPV will take Rs 5,150 crore stand alone debt of Lanco Infratech, to help clean its books according to the official. The official refused to be named for the story.

According to the official, the lead bank ,IDBI, has given approval for the proposed restructuring plan just a few days ago and the company was awaiting the nod from the remaining members of the lenders consortium to roll-out the plan. The restructuring plan also include the de-merger of the EPC division. The lenders are expected to restructure the loan of each of these projects post approval of the corporate restructuring plan, the official said.

Earlier news reports suggested that the company had roped in O P G Ventures as the new promoter by offering a 51 percent stake in the proposed power holding company for just Rs 150 crore.

Total debt of the entire group stands at over Rs 47,000 crore. The company, which had sold Udupi power project to Adanis for Rs 2,100 crore in 2014, has not been able to sell any asset since then. In the absence of new funding or equity, the under construction thermal power projects remained unfinished resulting in cost overruns.

"Issues that continued to affect the performance of the company in the reporting year(2015-16) include macro economic and sectoral issues, inordinate delays in disbursement of project loans, inadequate fuel supply, delay in sale of assets/raising equity from the market despite employing multiple investment bankers, poor financial health of Discoms among other things," Lanco chairman L Madhusudan Rao said at the company's annual general meeting on Tuesday.

He told the shareholders that the company hopes to complete the under construction power projects in the next 26-27 months time.