Lanco Infratech to sell its power business

Lanco Infratech, an independent power producer remained in the limelight for the entire trading session on Friday where the stock surged 12.07 per cent to Rs 4.92. Lanco group has shortlisted four players for the sale of its power business. The estimated value of the business is Rs 45 thousand crores including its debt.

Among the four bidders are Tata Power and JSW Energy for the Lanco Power assets. The assets amount to nearly 8000 megawatts. The company is seeking for Rs 4.5 crores/megawatt while the buyers were bidding at Rs 3 crore/megawatt. Tata Power remains silent about the talks with Lanco and JSW Energy has denied any such talks with the company.

The lenders to the Lanco Group are ICICI Bank, IDBI Bank, Bank of India, Bank of Baroda and Punjab National Bank. Earlier in April 2016, lenders to Lanco were looking to get hold of a strategic investor at power holding company level or SPV level for its 8000 megawatt portfolio.

According to the recent quarter results of the company, it has posted a consolidated net loss of Rs 200.71 crores as against the profit of Rs 94.20 crores in the last quarter despite of growth in revenues. However, the power segment has seen a loss in revenues from Rs 1449.73 crores to Rs 1338.76 crores in Jan-Mar quarter. Moreover, the PBT from power segment has dropped from Rs 399.62 crores to Rs 238.96 crores QoQ.

With respect to it, the exchange has advised the Company to provide clarification/confirmation on the news item in detail including the following: a) Whether such negotiations were taking place and b) Whether you/company are aware of any information that has not been announced to the Exchanges which could explain the aforesaid movement in the trading. The response from the company is awaited.