New Delhi: Lenders to Lanco Infrat-ech, which is bogged down by mounting debts, is looking to expedite asset sales and release of priority loans, among other options, to improve the group’s “precarious” financial position. The diversified group, with interests in power and EPC segments, has an aggregate outstanding debt of about Rs 49,000 crore from around 47 lenders, according to sources. The company has an order book of Rs 21,000 crore. During a recent meeting of lenders and Lanco officials, it was assessed that the group’s financial situation is very precarious, according to bankers.
The group’s cash flows are heavily strained and at present, there are overdues of about Rs 1,700 crore to the entire banking system, they added. To improve the financial position, lenders would explore which assets could be sold at the earliest to reduce the debt burden apart from the company taking steps to expedite monetisation of assets. The meeting, held on August 18, was chaired by Punjab National Bank’s chairman and managing director K.R. Kamath. Lenders would also look at expediting release of priority loan and need-based non fund facilities to kick start the operating cycle, bankers said.
Besides, it has been suggested that promoters should explore the possibility of raising money through capital markets even if smaller amount at current lower valuation to demonstrate their commitment to improve the overall position. Lanco has sought financial support from the lenders in the pattern of 80:10:10. Out of it, 80 per cent would be overall debt and 10 per cent would be sub-debt which can be converted into equity at the lender’s option any time before commercial operation date. Under the proposed plan, each lead lender for projects under construction would consider financing in 80:10:10 ratio or convert part of debt into equity upfront. They might also reapprise the project within end of this month, bankers said.
