The Lanco Group will sell assets worth Rs 7,600 crore as part of the loan recast package approved for the group’s holding company, Lanco Infratech, reports Vishwanath Nair in Mumbai. Senior officials at the corporate debt restructuring (CDR) cell told FE that three of the group’s power projects are to be sold and that the sale is expected to fetch around R6,300 crore.
Some of the group’s troubled power projects include the 1,466 MW Kondapalli project, 1,320 MW Amarkantak power project phase II and the 1,320 MW Vidarbha power project.
However, these assets are expected to be sold only between 2016 and 2020. “By virtue of being the holding company, Lanco Infra has some shareholding in the assets. Once these are sold and the dues cleared, Lanco Infra will get its share,” a senior public sector banker explained, pointing out that the 27-bank consortium led by IDBI Bank might only get a small share of the proceeds. Nevertheless, bankers hope the asset sales will ease the group’s cash flows and help Lanco Infra focus on its core operations. The Lanco Infra stock ended at R7.57 on Thursday, up 10.51% over the previous close on the BSE. The benchmark Sensex was up 0.2%.
While the CDR cell has approved a loan recast for Rs 7,500 crore, bankers have also agreed to lend the company an additional Rs 3,200 crore. The promoters are expected to bring in Rs 150 crore as their contribution to the CDR package. The group’s consolidated net debt, as on September 30, stands close to Rs 35,700 crore.
In an emailed statement, the Lanco Group said, “Kindly note that we do not wish to comment on this speculative news.”
The consortium also includes lenders like Punjab National Bank, State Bank of India, ICICI Bank and Allahabad Bank, apart from financial institutions such as LIC, IDFC, Srei Infrastructure and Tata Capital. For a debt recast to be approved, it must be agreed to by 60% of the lenders by number and 75% by the value of the exposure.
In October, the CDR cell saw loans worth Rs 22,269 crore being referred to it, the largest in a single month, while only Rs 4,935 crore was approved by it. In the first six months of this financial year, referrals touched Rs 24,859 crore and cases worth Rs 22,007 crore were approved. Bankers expect referrals to touch Rs 1 lakh crore by the