Hyderabad: Debt-laden Lanco Infratech Ltd is looking to raise $1 billion ( 6,642 crore) in the next two years by selling stake and listing its power assets in order to pare debt and complete pending projects.

The company aims to get an additional operational power portfolio of 4,000 MW in the next few months. At present, the company has an operational capacity of 4,000 MW.

“The plans are to raise $1 billion in the next 24 months, part of which will be used for asset completion and rest to pare debt. There will be more clarity on which assets to use for strategic sale after six months. Once the Amarkantak 1,320 MW plant gets operational in the next 14 months, the next 10 months will be used towards raising funds," said T. Adi Babu, chief operating officer, finance, Lanco Infratech.

In the September quarter earnings reported on Monday, the power producer reported a profit uptick after a gap of three years owing to start of halted projects. The company reported a net profit of 99 crore against a loss of 527 crore in the year-ago period due to commencement of work in halted projects and rise in Engineering Procurement Construction (EPC) revenues.

Of the total amount it plans to raise, the company will use 3,000 crore to reduce debt and a similar amount to complete projects, Reuters reported on Tuesday.

The company may also list the power subsidiary and assets on the stock exchanges to raise the targeted funds. “We are in a very preliminary stage and there is reasonable time to get into some discussions with strategic investors. Apart from sale we would also consider listing the power assets or the power subsidiary or a combination. The idea is to raise $1 billion in next 24 months through various ways," said Babu.

Lanco’s debt at the end of September quarter stood at 35,000 crore. This would rise to 45,000 crore in the next 18 months due to cost overruns from its power projects.

The company plans to reinvest in the next two years for power projects including those at Amarkantak, Mandakini and Vidarbha, which have cost overruns of 30%.

Once operational, projects totaling 8000 MW will be able to service debt regularly, according to Babu. “Debt is not a concern once all the projects are operational. In the next few months we will also start participating in bids to tie-up power purchase agreements. Our hurry is more to get the projects operational than to reduce debt," he said.

Lanco’s shares closed at 6.39, up 19.89% on the BSE on Tuesday. The benchmark Sensex closed at 25,775.74 points, down 0.17%.

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