Lanco gets nod to revise coal agreement with Griffin: CEO

Nagaprasad Kandimalla, CEO, business development at Lanco Infra, says that the court has issue an order in favour of Lanco to revise coal supply agreement with Griffin Coal Mining Company. He also says that the litigation is still on with Perdaman.

Also read: Lanco Infratech up 8% on coal agreement with Griffin Power

Below is the edited transcript of his interview to CNBC-TV18.

Q: What has the court observed?

A: The court has issued an order last week in our favor for allowing us to continue with our business proposal to revise our coal supply agreement with one of the largest coal off takers, Griffin Coal Mining Company,  Australia. 

Q: Your press release indicates that there is a substantial up front payment involved to Griffin Coal Mining Company, what does that amount to?

A: In terms of net present value this revised coal supply agreement will give us an additional 150 million Australian dollar.

Q: Is this a full and final settlement in terms of where the issue stands between Perdaman and Griffin?

A: This is different from our on going litigation with Perdaman. This is a coal supply agreement that we have with Griffin Coal, it is called the Bluewater power station. This deal is about revising our coal supply agreement with Bluewater power station.

Q: There were also reports that the former owner of Griffin Coal actually wants to claim back their mines, has that issued being settled ?

A: That is completely baseless. Griffin Coal is a company owned by Lanco Group so, the question of Griffin Coal owning the asset back is absurd in that context. There was a litigation raised by a company in Australia about a trivial issue of compliance with the government which again is baseless and I am hopeful that we will have order on January 13.

Q: By when front payment will get booked for Lanco and whether it comes straight on Lanco’s books?

A: The transaction is likely to be closed by mid January.

Q: Will this come directly into Lanco's books?

A: The proceeds will account into Griffin books. Griffin is 100 percent owned by Lanco subsidiary, Lanco Resources Australia.

Q: How soon do you expect a resolution on the other issue with regards to Perdaman?

A: Litigation with Perdaman is still on. Perdaman has raised a contention against us for doing this transaction, but the court issued an order in our favour. The litigation that Perdaman entered with us during last year is still in the court. Except that, we continue to build strength in our argument. The issue against us is baseless and we are hopeful that the case will go through trial by early to middle of next year. We have file a contract line against Perdaman to an extent of USD 250 million and everything will be heard together.