In talks with PE firms to raise $600m: Lanco Infratech

Talking about the company's high debt burden, G Venkatesh Babu, Managing Director of Lanco Infratech said interest rate hike is plaguing the entire infrastructure sector. "The rise in interest rates from 9% to 14% is the cause of the current pressure," he said in an interview to CNBC-TV18.

Further, he also said that the company is not considering short-term investors for raising funds. "The company is in talks with PE firms to raise USD 600 million because the macro issues affecting India are temporary and PE investors will understand that much better than short term investors. The fund raising will happen over the next six months by June 2012," he said.

Below is an edited transcript of G Venkatesh Babu's interview to CNBC-TV18. Also watch the accompanying video.

Q: Can you take us through what the current debt situation stands at? What sort of interest payments would you be servicing for the remaining part of the fiscal and what exactly is the outlook for 2012 in order to pairing it off?

A: Typically, on the power sector we fund our projects based on 75-25 debt-equity or 80-20 debt-equity, considering the share price and scale of the projects and from that perspective when you are starting a project you start off with debt equity of 4:1. Hence, when you see debt equity ratio at 3.5 or 4, it doesn