Companies

Lanco seeks Rs 1,000-cr debt rejig

PTI Hyderabad | Updated on March 12, 2018 Published on February 22, 2015

Cash-starved Lanco Group has approached lenders to reschedule Rs 1,000 crore debt of two of its gas-based power plants in Andhra Pradesh till January 2018.

The infra major has also sought similar reprieve from lenders for some of its power plants under Reserve Bank of India’s 5/25 formula, a senior executive of Lanco said.

T Adibabu, Chief Operating Officer of Lanco Infratech, said the consortium of lenders led by Axis Bank is likely to give nod for the restructuring of loan for the two plants in a few days.

Lanco Kondapalli Power Limited ( LKPL) operates three gas-based power plants in Andhra Pradesh.

Two plants — Unit-II and III — are not able to operate due to lack of gas supplies from KG—Basin. Unit—III is yet to declare Commercial Operation Date.

“Between these two units the debt is around Rs 2,400 crore for a capacity of 1,100 MW. We are seeking restructuring of Rs 1,000 crore debt from the lenders. The lead lender Axis Bank is actively considering the proposal. They may approve the proposal shortly,” Adibabu told PTI.

Justifying the restructuring of debt, he said they expect the gas supply situation is expected to improve by 2017 and by then the Unit—III would also start operations with at least 25 to 30 per cent capacity.

“Because of this uncertainty, what we have requested the lenders is to restructure the loan till January 2018 so that there will not be any repayment pressure. We will service the interest component. Without operations servicing the interest itself is a big challenge,” he added.

He said the Group is also in the process of approaching lenders to rescheduling of loans of some of its power plants under the Reserve Bank’s 5/25 Rule.

This rule enables a bank to extend loans to an infra developer for 25 years with an option to rewrite or reset the terms of the loan or transfer it to another bank or financial institution after five years.

It ensures that tenure of the loan matches the lifecycle of the underlying asset.

According to him, power plants owned by the group operate at 40 per cent on an average.

On the Udipi Power plant which the company has an agreement to sell to Adani, Adibabu said the deal is expected to be closed by March 2015.

Published on February 22, 2015
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