The Hindu Business Line : Lanco Infra set to restructure operations

Revamp mode
Each sub-holding company is expected to manage special purpose vehicles for different projects.
The company plans to add 4,000 more people.

V. Rishi Kumar

Hyderabad, May 21 Lanco Infratech Ltd, the listed entity of the diversified Lanco group, is poised to restructure its operations along verticals by creating three sub-holding companies — power, construction and infrastructure and realty.

This restructure process is likely to be completed by the third quarter this fiscal. Each sub-holding company is expected to manage special purpose vehicles for different projects, according to Mr G.Venkatesh Babu, Managing Director of Lanco Infratech Ltd.

Speaking to Business Line, Mr Babu said “we have grown at a very rapid pace and projects under implementation are at various stages, many of them close to being commissioned. This has meant a truly diversified portfolio, which individuals and investors would find it difficult to track.”

The restructure, he said, would remove the disconnect between the company, shareholders and investors and also enhance value.

POWER SECTOR

“For instance, we now have 600 MW generating capacity and are in the process of creating a capacity of 13,000 MW by 2012. This will generally look far fetched. The reality is that the financial closure of about 6,000 MW has been completed and once we start adding capacity starting two months from now, in less than two years most of these projects would go commercial,” he said.

“The Lanco Amarkantak project will add about 600 MW by December-March and the 1040-MW Nagarjuna project at Mangalore will be ready by December 2009, so will several hydel units,” Mr Babu said.

INFRASTRUCTURE

“The company has won several prestigious projects such as development of a Rs 8,000-crore Vizhinjam port near Thiruvananthapuram and Varanasi airport project and the company has been short-listed for the Amritsar airport. We are also looking at more airport projects, both in India and overseas,” he said.

“We are also part of a consortium of Essar and Alstom in race for the Mass Rapid Transit System in Mumbai,” he said.

HEADCOUNT

“The company decision to restructure on vertical lines is well thought out and is aimed at helping us manage it better through special purpose vehicle for each project. As a part of this, the company is looking at adding about 4,000 people more thereby doubling the headcount in the company within a couple of years,” Mr Babu said.

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