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Lanco to sell Australian acquisition
Lanco drawing up an agreement with commercial banks to restructure the debt on this company which has risen astronomically to about Rs 33,900 crore.

The cash strapped power developer, Lanco Infratech Ltd, is considering sale of its Australian unit, Griffin Coal Mining Company to repay its debts. This second largest power producer in the private sector acquired the unit in 2011 for 750 million AUD dollars (equivalent to US $ 665 million). The company is considering sale of a hydroelectric power plant in India.

Lanco is selling Griffin as it is said to be unprofitable. It’s drawing up an agreement with commercial banks to restructure the debt on this company which has risen to about Rs 33,900 crore. Lanco is among those companies which have all taken a big hit with their acquisitions in Australia as prices of the black fuel have fallen for the last three years consecutively.  Power station coal prices in Australia’s Newcastle Port fell 1 per cent to $ 85.41 per tonne for the week ended 03 January 2014. Prices fell by 6.5 per cent in 2013, the third year of such decline.

Griffin Coals’ loss has mounted to Rs 105 crore till March 2013. Its mines in Western Australia’s Collie Basin produce four million tonnes of coal a year and Lanco had planned to boost output to about 18 million tonnes by fiscal 2018. Lanco approved a debt re-structuring proposal in December last year that mounted to more than four times since March 2010.  Its lenders include ICICI and State Bank of India. Lanco runs a 70 MW hydropower plan in Himachal Pradesh.

 

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