Hyderabad: Power producer Lanco Infratech Ltd said on Monday the Supreme Court of Western Australia ruled in its favour in a lawsuit filed by Perdaman Chemicals and Fertilisers Pty Ltd.
In effect, the court allowed Lanco’s Australian subsidiary Griffin Coal Mining Co. Pty Ltd to revise a coal supply agreement (CSA) with Griffin Power entities, which includes Bluewaters Power Station that is being acquired by Japanese companies.
Lanco, through its Australian subsidiary Lanco Resources Australia, acquired Griffin Coal Mining and Carpenter Mine Management for A$720 million in February 2011. Last year, Griffin produced more than 3 million tonnes of coal.
Griffin Coal has a long-term fuel supply agreement with Bluewaters that it sought to revise. But Perdaman challenged this as part of a A$3.5 billion lawsuit it filed against Lanco after the Indian company cancelled a supply agreement Perdaman had with Griffin Coal.
Lanco, in a statement to BSE on Monday, said the court rejected Perdaman’s plea and that “the revised CSA will result in a gain of approximately A$150 million in net present value (NPV) terms, including a substantial upfront payment to Griffin Coal Mining Company Pty Ltd”.
The state of Western Australia too had urged the court to reject Perdaman’s request, saying cessation of operations at Bluewaters would remove 431.8 megawatts of generating capacity from the grid.
“This is a positive development for Lanco. Griffin is coming to a good shape...We will be getting more revenues once the revised CSA is in place,” said Lanco chief executive for business development, Nagaprasad Kandimalla.
A revised pact is expected to be signed by the middle of January, Kandimalla said, but refused to give details of the pricing.
Lanco has subsidized the operations of the coal unit, which made a loss of A$43 million in the year ended 31 March. Lanco invested around A$132 million between 14 July 2011, and 23 October this year in the unit, the company said.
Shares of Lanco gained 7.42% to close at Rs.13.46 on Monday on BSE, while the benchmark Sensex rose 0.07% to close at 19,255.09 points.