Mumbai, Aug. 13: The Adani group will acquire the 1,200 mega watt (MW) Udupi plant of Lanco Infratech Ltd in a deal valued at more than Rs 6,000 crore, the largest in the thermal power sector.
This development comes within a few days of Reliance Power Ltd (RPower), the Anil D. Ambani company, signing agreements to buy 1800MW hydro power assets of the Jaypee group. Though the deal details were not disclosed, it is reportedly valued at over Rs 10,000 crore.
In a late evening announcement, Lanco Infratech said this transaction would help it to reduce its debt. The company added that Adani would pay Rs 2,000 crore in cash and take Udupi plant’s long-time debt of Rs 4,000 crore. Lanco’s total debt is estimated at over Rs 38,000 crore.
Lanco Infratech said the imported coal-based power plant in Udupi supplied 90 per cent of the power generated to Karnataka and 10 per cent to Punjab.
It is the first independent power project in the country based on 100 per cent imported coal with a captive jetty of 4 million tonnes and an external coal-handling system in the Mangalore Port Trust. Its capacity can be expanded by another 4 million tonnes, the company said. The plant has also entered into an agreement with the Karnataka government to expand its capacity to 1,320MW.
Lanco Infratech had earlier confirmed that it was in discussion with some strategic investors for a stake sale in thermal projects.
Both the Udupi and the Jaypee-Reliance Power transactions indicate the interest shown by buyers in power assets. It is felt that the Narendra Modi government’s focus on infrastructure could be one of the reasons behind such deals.
Lanco Infratech has interests in EPC (engineering, procurement and construction), solar power, natural resources and infrastructure.
In February this year, the company sold its 70MW Budhil hydropower plant in Chamba district of Himachal Pradesh to Greenko, the Indian developer, owner and operator of clean energy projects.
The sale of the plant was part of the corporate debt restructuring (CDR) package approved by its lenders.
Ahead of the deal, the Lanco stock today ended nearly 5 per cent lower at Rs 8.53 from the previous close of Rs 8.96 on the Bombay Stock Exchange.