Lanco Infratech , targeting divestment of some of its assets to bring down around Rs. 35,000-crore debt, has got interests from Indian and foreign private equity funds as well as Essel Infra Projects Ltd for its twin road assets in Karnataka, a source familiar with the development told Moneycontrol.
Besides Essel, investment manager IDFC Alternatives, US-based private equity firm I Squared Capital and Uniquest Infra Ventures Pvt Ltd — a joint venture of Malaysia’s UEM Group and IDFC Ltd — are learnt to have expressed interest in buying the road assets, according to the source. Mails sent to Lanco and Essel remained unanswered while others could not be reached for comment. Both the assets are operating and Lanco collects toll on them, said to be around Rs. 130 crores per year collectively. One is an 81-km stretch connecting Bengaluru– Hoskote–Mudbagal while the other is an 82-km highway from Neelamangla to Devihalli in the southern state.
The two assets carry a concession period of 20 years and 25 years respectively. Both the foreign funds — I Squared and Uniquest — are already investors in more than a couple of road projects in India. “Roads are among the least risky infrastructure assets, attracting good interest from both local and foreign funds. Talks on road assets between Lanco and the investors may take a little more time due to differences on valuation even as debt reduction remains a key issue for the company,” the source said. Besides looking to divest its road assets, the source said Lanco was also working on its strategy of creating a holding company structure for its power capacities.
“The idea is to put all the operating thermal assets under a holding company and hand strategic investors a 51 percent stake in it. The lenders to the projects could also then be offered some stake,” an official familiar with the development told Moneycontrol.
According to letters sent earlier by Lanco to the exchanges, the company is in discussion with lenders to sell/securitise some of the operating assets and also bring a strategic investor at a power holding company level. The company currently has an operating power capacity of 3,460 MW including 64 MW of renewable portfolio. Capacity under construction is 4,636 MW including 676 MW of renewable power. Of the under construction capacity, 1,320 MW of coal-based power and 176 MW of green energy is expected to be commissioned by March.Lanco Infra is due to announce its September quarter eanings today.