Nwe Delhi, August 14, 2014: Lanco Infratech Ltd. (LITL), on Wednesday, sold its 1,200-MW Udupi Power plant to Adani Power for more than Rs.6,000 crore. This is the largest deal in the thermal power space, the company said.
As part of this deal signed on Wednesday, Lanco will get Rs.2,000 crore, and Adani Power will take over Udupi Power’s long-term debt of around Rs.4,000 crore.
The plant’s facility can be expanded as Lanco Udupi Power has already signed an agreement with the Karnataka Government for further expansion of the capacity by 1,320 MW.
This imported coal-based thermal power plant supplies 90 per cent of the power generated to Karnataka and 10 per cent to Punjab. This 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 capacity can be expanded to handle another 4 million tonnes, the company said.
“For Lanco Infratech, this transaction will support the company in reducing its debt, and will enable Lanco to receive about Rs.2,000 crore as cash,” Lanco Infratech said in a statement.
Lanco Infratech has a debt burden of over Rs.36,000 crore, and was in discussion with bankers for restructuring of its loans. Adani Power has been looking for power projects to boost its capacity. As on April 3, 2014, Adani Power had a generation capacity of 8,620 MW, making it India’s largest private power producer. Adani Power, controlled by billionaire Gautam Adani, did not offer any comment.
Lanco Infatech shares on Wednesday closed at Rs.8.53, down 4.80 per cent on the BSE. The deal was announced after market hours.