Sunday, September 30, 2012

Lanco Infratech Ltd will raise up to $1 billion by March 2013.

Infrastructure company Lanco Infratech Ltd is set to raise up to $1 billion (about Rs 5,500 crore) by March by sale of assets and equity infusion.
The infusion will be by way of sale of equity covering power projects, road assets and other segments, according to L. Madhusudhana Rao, Executive Chairman.
Speaking on the sidelines of the company annual general meeting here, the Lanco chief said the company has an installed capacity of 4,000 MW and implementing about 10,000 MW of power projects in all. “We plan to raise up to $750 million by sale divestment of equity in the power sector alone.
“We believe that the 10,000-MW capacity which is under the company portfolio, including those under implementation by 2015 are worth $10 billion (about Rs 55,000 crore). By divesting equity stake, we will bring down the overall debt-equity ratio to about 4:1 from about 4.3: 1,” he added.
In fact, Lanco consolidated various power assets and was in the process of finalising a public offer. However, the market conditions are no longer conducive. “Therefore, we are engaged in talks with private equity players to divest stake. We would have actually closed the deals but now we expect to close it by March,” he said.
The company plans to deploy $150 million in solar projects now at various stages of execution. Therefore, the fund raising would span power, roads and solar power segments.
Earlier, shareholders demanded the company management to consider dividend and bonus to reward them. The management stated that the conditions are tough for infra companies and it will take about few quarters more for things to get better.

SP Tulsian's View on Infra:

Q: What is your thought on the processes that are being fast tracked in the infrastructure space and how many projects can come on board and eventually help many of these infrastructure stocks?

A: I think quite positive and this has been the need of the hour, the difficulties which have been faced by National Investment Board will be giving fillip to all the projects. I am keeping my little apprehension on the airport projects except that, all will stand to gain. One can eye this space and mainly power generation because power generations or the power sectors look be the double beneficiary because of the Discom restructuring and formation of the National Investment Board. One can keep an eye on Lanco Infra , IVRCL  , Nagarjuna Construction Company, they will all be seen to be the big beneficiary of this National Investment Board move.

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