The turbulent economic environment, volatile currency and shortage of resources, has forced infrastructure firm Lanco Infratech, to put two of its super critical thermal power projects on the back burner.
The company will not undertake any new projects and would work on consolidating its existing projects over the next three years.
Lanco was to set up a 2X660 mw coal-based super critical power plant at Himavat besides embarking on the second phase of Anpara (2X660 mw). Both projects have necessary environment clearances from the Ministry of Environment & Forests in place.
“We have all the approvals and have even acquired land. But at this juncture (considering a tight economic situation and shortage of coal), it will be difficult to achieve financial closure for these projects and hence we have decided not to pursue them for time being,” T Adi Babu, CFO, Lanco told Express.
Over the next three years the company will only try to execute existing projects before taking up any new projects be it coal-based power plants or solar, he said.
Currently, Lanco has an installed power capacity of 4,732 mw and is in the process of developing another 6,840 mw. Another 4,636 mw worth power plants are also under construction.
It also has a solar farm development portfolio of 141 mw (41 mw operational and another 100 mw under construction).
Apart from Lanco, another city-based infrastructure major GVK too announced last year that it was going slow on taking up new power projects considering the resource shortage besides financial constraints. Nearly 16 power projects from Andhra Pradesh alone proposed by seven companies including GVK and Lanco have been indefinitely stalled.
Meanwhile, the company is straddled with a high debt burden and is in the process of restructuring its corporate debt to the tune of `7,500 crore. As of June, 2013, Lanco Group’s consolidated net debt stood at `34,770 crore.
Lanco’s consolidated net loss widened to `1,073 crore for the year ended FY13 compared to a net loss of `112 crore a year ago. The net loss in FY13 was despite the company reporting a 25 per cent rise in its income.