Diversified infrastructure and construction firm Lanco Infratech has decided to hive off its power business and list it separately on the bourses. The process is expected to be completed by the end of 2013.
The company also plans to later hive off its other verticals like EPC, solar, natural resources and infrastructure, executive chairman L Madhusudan Rao told FE. On FE?s report on its edition dated June 15 that Lanco had barred persons, including family members working in the political domain from being members either of the company’s management or board, Rao said, “We have prepared a family constitution to keep business management and politics separate.?
Lanco is the largest private power producer in India with an installed power generation capacity of 3,300 mw. ?The power business is already of a significant size and our internal projection is that the business will be hived off and listed within next two years,? Madhusudan Rao said. ?As other individual business verticals achieve greater size and scale, we will also list them as distinct independent entities,? he added.
The company has prepared a growth strategy under which it will add another 11,700 mw power generation capacity by year 2015. It has arranged for R 32,550 crore to develop 6,000-mw projects. ?For the balance capacity, we would invest Rs 5,000 crore as equity and are in talks with some Chinese banks for the debt portion,? Lanco’s managing director G Venkatesh Babu said.
Beyond 2015, Lanco will chalk out expansion plans ?very cautiously? due to shortage of coal and unsustainable tariff. ?Coal is in short supply within the country but we can live with the given resources for next 3-4 years. After that imported coal will have a larger role. However, with imported coal we cannot offer a tariff of R3 per unit as is being offered by companies today,? Rao said.
?Gas is a viable alternative moving forward and people will be sensible in putting up gas-based capacities. But coal will remain the dominant resource for the power sector,? he added. As a safeguard against the problems being faced in India, the company is looking to buy assets overseas. In March 2011, Lanco bought Australia’s Griffin Coal for R3,500 crore to satisfy 30% of its overall coal demand by 2015. ?We are in talks with some companies in India that are in distress and want to exit the power business to buy their assets,? Babu said.
The company is also increasing its global play. It has bid for power projects in Bangladesh and Indonesia, and is in talks for acquiring coal assets in Africa. ?We also have a base in Singapore that is looking for opportunities in emerging economies,? Rao said.