Lanco Infratech Ltd is close to completing a major restructure of its power assets. The process is likely to be completed by November-December this year.

The restructured entity will bring together the diversified infrastructure company’s several power assets under one umbrella. Lanco can then divest a stake to a strategic investor, with which it is at advanced stage of parleys.

The restructure and divestment, which the consortium of lenders is closely monitoring, will help Lanco to bring down the debt of about ₹7,000 crore at its holding company. The rest of the debt will be at the special purpose vehicle (SPV) and subsidiaries levels.

Alongside this, the company is also considering the divestment of its 1,200 MW Anpara asset by early next year. This will help it not only slash its debt but also infuse the freed up equity into power projects under implementation, said Lanco and banking sources seeking anonymity.

Lanco, which has been battling to bring down its debt, had initiated a series of measures, including corporate debt restructuring. It is now focusing on trimming down its power assets.

Earlier in the day, at its 23rd AGM held here, Lanco Chairman L Madhusudhan Rao told shareholders that several macroeconomic and sectoral issues continue to impact the performance of the company. These include 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, and poor financial health of discoms.

While the company has an installed capacity of 3,465 MW generating revenue of ₹6,220 crore in 2015-16, it has 4,636 MW of capacity under construction. The implementation of under-construction projects is getting held up dued to delayed approvals. Disbursement of capital from the lenders and strategic and financial investors to augment the cash gaps is also seeing delays.

Lanco brought down its net loss to ₹266 crore in 2015-16, from a loss of ₹2,037 crore in the previous fiscal. This was mainly due to favourable tariff orders secured in several projects. The company posted a cash profit of ₹441 crore against a cash loss of ₹506 crore in the previous year, Rao said.

“Your management is confident of tying up the necessary funds for completion of these under-construction projects, which will give value to all the stakeholders,” he said.

The Griffin coal project in Australia posted revenues of ₹500 crore and loss of ₹189 crore and is seeking to enhance capacity, he added.

Several shareholders raised issues relating to mounting debt and delay in divesting stakes in some of the company assets as planned before. One of the shareholders demanded an early dividend. Yet another

wanted the management not to hike the salary of the directors as the company is still making losses.

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