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Lanco sells Udupi plant to Adani Power for 6,300 crore
Lanco sells Udupi plant to Adani Power for 6,300 crore.Lanco Infratech Limited (LITL), a part of infrastructure major Lanco Group, on Monday said it successfully completed the sell-off of its Udupi power plant to Adani Power Limited.
Transaction has helped the infra major to reduce its debt burden
Hyderabad: Lanco Infratech Limited (LITL), a part of infrastructure major Lanco Group, on Monday said it successfully completed the sell-off of its Udupi power plant to Adani Power Limited. The transaction is valued at around Rs 6,300 crore, making it the largest acquisition in India in the thermal power space. Lanco, which announced the deal in August 2014 as part of its debt restructuring strategy, set up 2 X 600 MW (1,200 MW) imported coal based power project in the Udupi district of Karnataka. “With the completion of the transaction, Lanco Infratech has realized the enterprise value of around Rs 6,300 crore by reducing long term debt and realizing its equity value,” Lanco said in a statement.
The deal helped Lanco to reduce its debt position – long-term and short term debt now at Rs 4,275 Crore and Rs 2,147 respectively - and boost cash flow keeping in mind the initiatives being taken and the plans being charted out by the new government in order to revive the distraught power sector, it added.“The overall transaction will provide considerable boost to Lanco and aid the company in gearing up to commit itself in consolidating, repairing and rebuilding in line to leverage the opportunity that the new Govt. will create in the power and Infrastructure sector within the next two years,” the company further said.
The Udupi plant is the country’s first independent power project based on 100 per cent imported coal with a captive jetty of 4 million tonnes per annum and an external coal handling system in the new Mangalore Port Trust. The plant's generation capacity can be expanded as the company has already signed an agreement with the Karnataka government for further expansion of the capacity by 1,320 MW more.
Currently, Lanco has 3450 MW assets operating in various states in the country and 4,636 MW is under construction at various stages. They have around 7,000 MW capacities under development and some of these assets have coal blocks and 100 per cent regulated tariff. Ithas laid out a plan whereby it will look at more such strategic sell-offs like Udupi to streamline its operations and strengthen the core of its business.
