Adani Power acquires Lanco's Udupi power plant for Rs 6,000 cr

Adani Power, a part of Gautam Adani-controlled Adani group, has bought Lanco Infratech’s Udupi power plant at an enterprise valuation of Rs 6,000 crore. While Adani will take over the plant’s Rs 4,000 crore worth of debt, Lanco will receive Rs 2,000 crore in cash, which it plans to use for lowering its debt.
 
This is the largest acquisition in the thermal power space and comes within weeks of Reliance Power’s deal to buy the Jaypee group’s hydropower assets for a reported valuation between Rs 12,000 crore and Rs 15,000 crore. The Jaypee-Reliance Power deal will close by the end of the year.
 
The Udupi project has power sale agreements with Karnataka to sell 90% of generated power and with Punjab for 10%. But the unit has been facing operational issues that even led to stoppage of production in June, as Rs 1,800 crore of arrears from the Karnataka Electricity Board piled up. Also, Lanco, which was importing Indonesian coal to run the power station via New Mangalore Port, failed to lift the fuel from a ship berthed at the port.
 
Lanco had put the power plant on the block two years ago, aiming to use the proceeds to lower its consolidated debt (Rs 35,000 crore as of March this year). The company went for a Rs 7,000-crore corporate debt restructuring in December last year, with Rs 2,500 crore as priority loan from lenders.
 
FOR COMPLETE REPORT READ: Adani buys Lanco's Udupi power plant for Rs 6,000 cr