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Lanco in Talks to Raise Up to $750M to Fund Expansion

  • Lanco Infratech Ltd is in talks with investors to sell a minority stake in its power business to raise USD 600 million to USD 750 million to fund expansion, a senior executive said on Tuesday, sending its shares up as much as 19%.The company, whose main activity is engineering and construction, aims to spin off the power business and sell a stake in it by the June quarter, said Philip Chacko, director of investor relations."There are quite a few interested parties who wanted to partner with us -- people, who have a long-term view on the power sector in the country," he said in an interview over the phone.
  • The cash will be used to partly fund a 4,900 megawatt capacity plant it is constructing and for another 4,000 MW project it plans to build. It currently runs a 4,400 MW plant.Lanco, which had net debt of 317.55 billion rupees at the end of December, has hired Macquarie for the fund-raising and the talks include financial and strategic investors, Chacko said.India plans to add 76,000 MW generation capacity in the five years to 2017 to help bridge a peak power shortage of about 11%.Lanco is also planning to sell its wind power business, which it considers "non-core" and plans to focus on conventional and solar energy, Chacko said, without elaborating.
  • Its wind power business comprises an operational 13 MW wind farm and licences for additional 3,300 MW.Shares in Lanco, valued at USD 788 million, ended up 16.4% at Rs 18.80, while the main stock index closed 0.43% higher.Lanco earlier reported a 67% fall in December-quarter profit to Rs 1.83 billion.

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