The enterprise value of the deal is pegged at Rs 6,300 crore
Lanco Infratech Limited (LITL), an integrated infrastructure player with business verticals in engineering, procurement and construction (EPC), power, solar, natural resources Monday announced that it has successfully completed the sell-off of its Udupi power plant to Adani Power Limited. This makes it the largest acquisition in India in the thermal power space. The transaction was announced in August 2014, as part of Lanco's debt restructuring strategy.
Udupi has set up 2*600 MW imported coal based power project in the Udupi District in Karnataka. It is the country's first independent power project that is based on 100 percent imported coal with a captive jetty of 4 million tonnes per annum and an external coal handling system in the new Mangalore Port Trust. The plant's facility can be expanded as Udupi has already signed an agreement with the Karnataka Government for further expansion of the capacity by 1,320 MW, the company said in a release.
Following the completion of the transaction, Lanco Infratech has realized the enterprise value of around Rs 6,300 crore by reducing long-term debt and realizing its equity value. The deal helped Lanco to reduce its debt position with long-term and short-term debt now at Rs 4,275 crore and Rs 2,147, respectively.
The overall transaction will provide considerable boost to Lanco and aid the company in gearing up to commit itself in consolidating, repairing and rebuilding in line to leverage the opportunity that the new government will create in the power and infrastructure sector within the next two years, the company said.