Faced with difficult market conditions, diversified group Lanco Infratech carried out job cuts, trimming about 1,400 people in the last 14 months due to mounting debt, a senior company official said today.
Lanco, which is mainly into the power sector, is grappling with mounting debts and has outstanding dues of over Rs 3,500 crore from state electricity boards.
"With problems in the sector (power), our growth plans are on hold," Lanco Infratech Chief Operating Officer (Finance) T Adi Babu said.
When asked about job cuts at the company, he said there has been reduction of 15-20 per cent in its workforce over the last 14 months.
"Currently, we have a workforce of about 6,600 people," he said.
According to him, before the reduction, the total number of employees stood at around 8,000.
Lanco, which also has interests in infrastructure and realty segments, has posted a net loss of Rs 464.64 crore in the three months ended December 2012.
In the year-ago period, the company had a net profit of Rs 60.92 crore.
Poor financial health of state power distribution companies (discoms) is hurting the cash flows of Lanco. Out of the total receivables worth Rs 3,525.22 crore, about Rs 2,800 crore are overdue from the discoms.
Among them, Karnataka has an overdue of around Rs 1,500 crore while that from Uttar Pradesh is about Rs 850 crore.
Besides, the company has to get payments from discoms in Tamil Nadu and Haryana, among others, Adi Babu said.
Noting that conditions in the domestic power sector is not good, he expressed optimism that health of state electricity boards is likely to improve in the next six to nine months.
At present, Lanco has a debt burden of about Rs 35,000 crore excluding costs related to the acquisition of Griffin Coal in Australia.
Regarding plans for raising funds to improve the company's overall financial position, Adi Babu said it was working on various options such as roping in strategic investors.
"... We are also looking at securitisation of assets, which could include sale of non-core as well as core assets," he added.
However, specific details were not disclosed.
Lanco has an operational power generation capacity of 4,732 MW and another 4,636 MW is under construction.