Lanco Infratech has completed the sale of its Udupi power plant to Adani Power after resolving impending issues that had delayed the process after the two companies singed the deal in August 2014, Lanco said in a statement on 20-04-15.
The deal pegs the enterprise value of the Udupi Power plant at Rs 6,300 crore, making it the biggest deal in the power sector.
Lanco entered into a deal to sell the Udupi plant as a part of its strategy to raise funds to pare debt. The projects, the best in Lanco's power portfolio, attracted a lot of interest among potential buyers but finally Gautam Adani sealed the deal, outsmarting Sajjan Jindal-led JSW Group.
But since the deal was signed, Lanco and Adani has been embroiled in a legal battle after the deal could not meet the closure deadline in December.
In a statement 21-04-15, Lanco Infratech said it has realized the enterprise value of around Rs 6,300 crore by reducing long term debt and realizing its equity value. The deal has helped the company reduce its long term debt to Rs 4,275 and short-term debt to Rs 2,147 crore.
"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," Lanco said in the statement.
The Udupi power plant has 1,200 mw of imported coal based generation capacity and has 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, Lanco said.