Lanco to raise 5,000 crore by selling assets
Lanco Group, which is among the many corporates buffeted by the uncertainty in the power sector, has announced plans to sell 3,000 MW of assets to raise Rs. 5,000 crore cash in order to reduce the additional debt of Rs. 15,000 crore, said a company announcement.
“Since last one year, we have been working on each of the projects to settle the issues and bring back viability. With all these measures as well as in the background of various meetings with bankers and strategic partners, we are confident of driving the Group into profitability again,” said a statement by chief operating officer V. Sreeenivas in New Delhi on Tuesday.
Lanco Infratech has taken the first step in this direction by inking an agreement for the sale of its 1,200 MW Udupi thermal plant to the Adani Group.
Mr. Sreenivas pointed out that woes of the Lanco Group started in recent years due to an adverse macro economic environment and policy paralysis.
Having entered the power sector in 2000, Lanco till 2012 conceived and executed various projects successfully and emerged as a major private power developer with 4,732 MW under operation, 4,636 MW under construction and around 9,000 MW at various stages of development.
But Lanco’s fortunes dipped from fiscal 2013-14 despite increasing the capacity five times. “The high confidence that the investors in the power sector had during 2006-2011 was damaged and diminished. Since two years, the power sector has not been able to perform due to various major challenges such as transmission issues, and fuel issues besides deteriorated financial conditions of Discoms. These major issues have distanced the investors from the sector as investment into power sector should be looked at long term and not short term since value to the investment can be realised in 25 to 30 years irrespective of power purchase agreements,” reasoned the company.
With a new Government in saddle, Lanco is “highly optimistic” that it will resolve the many unresolved macroeconomic issues which will lead to an improvement in the power sector scenario over the next 15-18 months, added Mr. Sreenivas.
