Australia court verdict favourable for Lanco
Lanco continues to be plagued by regulatory uncertainties, operational challenges and ever-mounting debt that prevent us from taking a constructive view on the name. While tariff issues remain unresolved for Amarkantak, fuel availability remains a concern for gas-based (Kondapalli) and coal-based (Amarkantak, Anpara) power plants. We look at the current judgment on Griffin Coal favourably, though ultimate resolution of pending litigations with Perdaman is still awaited.
The Supreme Court of Western Australia’s rulingpaves way for Griffin to sign revised fuel supply agreements with Bluewaters while adjudicating on a petition filed by Perdaman Chemicals & Fertilizers. Earlier in November, Perdaman had filed an application to restrain Griffin from creation of charge or security of its assets and had sought an injunction on sale of Bluewaters to a consortium of Japanese bidders, after the coal supply agreement with Griffin Coal had been revised.
As per unconfirmed media reports, Lanco is looking to raise funds through sale of its Udupi (1,200 MW) plant at a valuation of R22-24 billion implying an EV of R68 million per MW. This follows on the heels of similar reports that talk of asset sales of other power plants, road
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