Lenders will take control at Lanco Infratech

On July 20, the stock price of Lanco Infratech has jumped by more than 6 per cent after the news came out  that the lenders of the company have decided to take control of Lanco Infratech by trading a part of the debt for a 60 per cent equity stake.

The corporate debt restructuring, involving about Rs 41,000 crore of debt across the group, is seen as one of the biggest such exercises in India. Due to such a debt restructuring, stake holding by the promoter group will come down to 24 per cent from 70 per cent, whereas the lender group will have 60 per cent of the stake in the company.

As per the revised reorganisation scheme approved by the lenders, the business of the listed entity, Lanco Infratech will be split into three: The new power holding company that OPG Power Ventures seeks to acquire will have all the coal-based power assets. The engineering,procurement and construction business will be demerged into a 100 per cent subsidiary, and the rest of the businesses including natural resources, real estate, roads, solar and gas will continue as subsidiaries or will be held by special purpose vehicles of the parent.

Lanco Infra tech is an integrated Infrastructure enterprise of India, comprising Power, EPC, Construction,Renewable, Resources, Non-Power Infrastructure, Property Development and CSR. It is an India based conglomerate. The company's business segments include construction,power, EPC, infrastructure, property development and renewable energy.