Lanco plans to raise $1B by selling plant, listing power arm

Aiming to pare debt, Lanco Infratech will raise USD 1 billion (about Rs 6,600 crore) through the sale of one of its large power projects and listing of its power business in the next two years.

The debt-laden firm, which posted a profit of Rs 100 crore after 3 years in the second quarter of fiscal 2015-16, is already aiming to sell power projects having capacity of 3,000 MW from 2018 onwards to raise around Rs 25,000 crore.

"We will sell one of our large power projects. This will happen somewhere in the next 18-24 months. Also another part is the listing of power assets, which has been discussed for quite some time. Through this we aim to raise close to USD 1 billion," Lanco Infratech COO T Adibabu told PTI.

The situation in the power sector is not very optimistic right now, but the short- and medium-term looks positive. The company will start operations of the power plant and then talk to interested parties, he added.

Lanco, which has a debt of around Rs 35,000 crore, is "very hopeful" that it will be able to manage the debt going ahead. The company is expecting a turnaround in 2-3 years when all its projects would be operational and improve cash flows.

In September, Lanco Executive Chairman L Madhusudhan Rao had said the company is looking at selling power projects having capacity of 3,000 MW from 2018 onwards and expects to raise Rs 25,000 crore, which would help to pare debt and also infuse fresh capital into the group.

Shares of the company on BSE today breached the upper circuit and closed 19.89 per cent higher at Rs 6.39.

Lanco Infratech is into engineering, procurement and construction (EPC), power, solar, natural resources and infrastructure.

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