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Sajjan Jindal's JSW Energy may be keen to acquire Lanco Infratech's 1,200 mw thermal power plant in Udupi, a person with knowledge of the matter said, even though the plant in western Karnataka was shut down last week amid a payment dispute between the operator and the state government.

"Lanco's shutting down the Udupi plant is only temporary.  It continues to make a lot of strategic interest for JSW and we are pursuing it aggressively," said the person. A deal for the plant would help cash-strapped power and road developer Lanco retire debt. that Lanco had stopped generation since 14.06. 2014 citing lack of money to buy coal.

Its two 600 mw units are fired on Indonesian coal, and they generate 25-26 million units a day at 85 Percent  plant load factor. The Karnataka government is planning to take legal recourse against Lanco. State Power Minister DK Shivakumar  that the state had "cleared their bills from time to time" and given INR 200 crore as advance to the company. "I don't know where they spent that money.

Now they have stopped generation all of a sudden," Shivakumar said. "If the firm continues with the shutdown, then the government will issue a notice and take action as per the law." Lanco Infratech declined comment.

In February, the Central Electricity Regulatory Commission had passed orders wherein the total receivables by the Udupi plant from Karnataka was estimated at INR 1,800 crore. The case is now before the Appellate Tribunal for Electricity that 1 Malaysia Development Bhd, the second-largest independent power producer in Malaysia, was keen to acquire Lanco's Udupi plant. Sources said the dispute and the litigation may not hinder a transaction.

Source-On Request