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Business News/ Industry / Energy/  UK’s Greenko may buy Lanco Infra’s hydro project
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UK’s Greenko may buy Lanco Infra’s hydro project

The firm is in talks to acquire Lanco's Budhil hydropower project in Himachal Pradesh for nearly `650 crore

Budhil hydropower project has a capacity of 70MW and was commissioned on 30 May 2012. It is located in the Chamba district of Himachal Pradesh. Photo: ReutersPremium
Budhil hydropower project has a capacity of 70MW and was commissioned on 30 May 2012. It is located in the Chamba district of Himachal Pradesh. Photo: Reuters

Mumbai/New Delhi/Hyderabad: Clean energy producer Greenko Group Plc, listed on the Alternative Investment Market of the London Stock Exchange, is in talks to acquire Lanco Infratech Ltd’s Budhil hydropower project in Himachal Pradesh for nearly 650 crore, three people aware of the development said, requesting anonymity. One of them is directly involved in the deal.

“We have been looking at offloading some assets. We are in talks with Greenko for (selling) this particular project (Budhil). We expect the deal to happen. The due diligence is on," said an executive of Lanco Infratech.

“The talks are in final stages and the transaction could be as much as 650 crore," said a Mumbai-based investment banker.

An analyst confirmed the development and said Greenko is considering buying other hydropower projects as well. “While Greenko is in talks with Lanco, it is also looking at acquiring other hydropower projects in Arunachal Pradesh," the Mumbai-based analyst said.

In May, Singapore’s sovereign wealth fund Government of Singapore Investment Corp. Pte Ltd had invested $150 million (around 940 crore today) in Greenko to help it build capacity of about 2,000 megawatts (MW) by 2018.

The news of the asset sale was first reported by ET Now television channel, citing an unnamed person, saying that Lanco Infratech needs to sell assets and infuse cash into the company to fulfil the terms of its corporate debt restructuring.

In December, Lanco Infratech’s bankers approved a proposal to restructure a total of 7,700 crore of the company’s debt, allowing the power generator a two-year interest holiday.

Lanco Infratech’s Budhil hydropower project has a capacity of 70MW and was commissioned on 30 May 2012. It is located in the Chamba district of Himachal Pradesh.

Budhil was registered as a clean development mechanism project with United Nations Framework Convention on Climate Change on 2 June 2009.

“It’s premature to comment at this point of time about Greenko’s acquisition of Lanco’s Budhil hydropower project in Himachal Pradesh," said C. Purushotham, director of finance at Greenko Group.

Purushotham said Greenko Group is looking at acquisition of assets in the hydropower space.

Last year, Lanco Infratech was in talks with SN Power of Norway for selling its stake in the hydropower generation business.

“We have no comments to offer at this point of time," said A. Narasimhan, senior vice- president (corporate communications) at Lanco Infratech.

Indian companies, especially those operating in the infrastructure space, began selling assets to pare debt, a fallout of rising interest costs and decreasing margins in a sluggish economy that has taken a toll on their financials. Since January 2013, at least 10 Indian companies have either sold or announced the sale of assets to shed 3.58 trillion worth of debt, according to Mint research and an August research report by Credit Suisse Securities Research and Analytics.

For example, GMR Infrastructure Ltd offloaded three assets from its portfolio in March to service its debt of around 40,000 crore. The company sold its natural gas power plants in Singapore, a 50% stake in South Africa-based Tshedza Mining Resource Pty Ltd, and a 74% stake in GMR Jadcherla Expressways Ltd.

Adani Ports and Special Economic Zone Ltd, a unit of Adani Enterprises Ltd, sold the Abbot Point Terminal in Australia in January to the group’s promoters, the Adani family.

It had acquired the asset two years ago for $235 million along with a debt of $2 billion. The Adani group’s total debt is around 81,000 crore.

deepti.c@livemint.com

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Published: 31 Jan 2014, 12:24 AM IST
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