Increase in power tariff in Tamil Nadu has come as a relief to Lanco Infratech, which has been facing the brunt of delayed payments from state electricity boards (SEBs). With Rs 100 crore coming in from Tamil Nadu State Electricity Board, the company is hoping to get its dues from SEBs cleared in another six months.
The company is yet to receive payments from states like Tamil Nadu, Karnataka, Andhra Pradesh, Uttar Pradesh and Haryana.
“In the last two months, many state electricity boards like Tamil Nadu, have increased tariffs. We have also been receiving payments. It might take another six months to receive all our payments,” said Phillip Chacko, investor relations head of Lanco Infratech, without revealing the amount of net receivables for the company.
A report by Crisil released on Thursday pegged Lanco’s receivables from its Amarkantak power plant in Chhattisgarh at Rs 555 crore, as on March 2012. The rating agency downgraded the power project’s rating to moderate risk from moderate safety. Lanco Amarkantak is near Pathadi village in Chhattisgarh and sources coal from South Eastern coalfields. The power produced from both the 300 megawatt units is bought by Power Trading Corporation of India (PTC).
The report said Lanco was also undertaking various measures to improve liquidity. “LPL has approached banks and other lenders to enhance its working capital facilities and provide short-term debt; it has commenced sale of electricity on the power exchange, wherein it gets paid for the sale of power on a daily basis; it is also aggressively following up with
PTC for realisation of debtors,” the Crisil report said.
SEBs have been facing financial stress due to power procurements costs in the past and fewer hikes in tariffs. This has realised into mounting debt and increase in pending payments for power generators. Over the last few months, however, many of them are taking remedial measures and some went into debt restructuring. Tamil Nadu state electricity board, for instance, raised money through a state government guaranteed bond issue.
Chacko said they have two pending tariff orders from electricity regulators for two of their projects-- Udupi power plant and second unit in Amarkantak. The receivables of these projects too will be cleared after the orders are cleared. “Ideally, we should get interest along with the receivables,” he said.
The 1,200-megawatt Udupi power plant is an imported coal-based power project which has power purchase agreements to sell 90 per cent of its power to Karnataka state, and the rest to Punjab state corporation. The company had defaulted loan repayments from this unit, over receivables which were stuck with the Karnataka state government.