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The consortium of lenders headed by ICICI Bank, who have appointed PWC to serve as a receiver and manager, may put up the Lanco Resources Griffin coal asset in Australia for sale.
PricewaterHouseCoopers Advisory Services Pte Ltd (PwC) has been entrusted the job and shares pledged with the lenders have been transferred to PWC.
The coal mine project acquired by the debt-laden Lanco Infratech Ltd in 2011 for $ 800 million, through its subsidiary Lanco Resources International Pte Ltd, has not been able to make progress due to cash crunch and poor demand for coal for the past five to six years. It has piled up losses of over ₹2,000 crore and saddled with a debt burden of ₹6,200 crore.
With the company defaulting on payment of dues over the past four months, about 100 million shares of the company, which were pledged to the lenders when the Griffin mine was acquired by raising debt, have now been transferred to the “Nominee of Security Agent PwC for the purpose of perfection of security”.
While the nominee of the Security Agent is the legal holder of shares of LRIPL, Lanco Infratech continues to be the beneficial holder of the shares.
T Adibabu, Chief Operating Officer, Finance, Lanco Infratech, told BuisnessLine that, “The coal mining project requires huge fund deployment to scale up output. We are not in a position to provide necessary funds for the project.”
“Therefore, we have been looking to bring in a strategic partner but the global market for coal has been subdued. With things getting better lately and prices firming up, we hope to bring in strategic partner or divest the entire stake,” he said.
With the lenders, ICICI, IDBI, BoI and Exim Bank invoking the provisions of Strategic Debt Restructure (SDR), during the receiver period and up to 18 months, the company will have a moratorium on interest payment, he explained.
The receiver will work on valuation of the asset, invite bids from the prospective buyers which could be from China, Malaysia or South Africa, where there is thermal generation capacity.
The parent Lanco Infratech, the diversified infrastructure company, is facing huge debt burden and seeking to divest stake in some of the assets to cut debt.
LRIPL, Singapore holds four subsidiaries in Australia — Lanco Resources Australia Pty Ltd, The Griffin Coal Mining Company Pty Ltd, Carpenter Mine Management Pty Ltd and Western Australian Coal Terminal Pty Ltd.
The Griffin mine was acquired when developers were chasing global assets to meet the domestic requirement.
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