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Lanco Infratech Ltd (LITL) has successfully completed the sell-off of its Udupi power plant to Adani Power Ltd, making it the largest acquisition in India in the thermal power space.
The transaction was announced in August 2014, as part of Lanco’s debt restructuring strategy.
Lanco has set up 2 X 600 MW imported coal-based power project in the Udupi District in Karnataka. It is the country’s first independent power project that is 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 facility can be expanded as Udupi has already signed an agreement with the Karnataka Government for further expansion of the capacity by 1,320 MW
Following the completion of the transaction, Lanco Infratech has realised the enterprise value of around Rs 6,300 crore by reducing long term debt and realising its equity value. The deal helped Lanco to reduce its debt position, with the long-term and short term debt at Rs 4,275 crore and Rs 2,147 crore respectively and thereby 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.
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