State-owned power companies close to buying insolvent Lanco's assets

14 Dec 2022 , 03:33 PM

According to three government sources that talked to Reuters, four state-run power corporations in India are close to outbidding Adani Group and Reliance Industries to acquire a 1,980-megawatt stranded power plant from the bankrupt company Lanco Infratech for Rs3,020 crore($364.84 million).

According to the sources, the state-owned businesses Power Finance Corp Ltd (PFC), REC Ltd, SJVN Ltd, and Damodar Valley Corp (DVC) want to buy Lanco Amarkantak's coal-fired power plant in Chhattisgarh, central India.

Following the collapse of its Gurugram-based parent business Lanco Infratech, Lanco Amarkantak had financial issues. Insolvency proceedings were referred to Lanco Infratech by project lenders, led by PFC.

For the first time ever, the power sector financiers PFC and REC entered the bidding to take over the management of a project and outbid the large industrial companies during this selling process.

The plant has three identical units, but only one of them is operational because the other two are still being built.

The sources added that PFC and REC would continue to control 25% of Lanco Amarkantak, making SJVN Ltd the dominant shareholder with 40% of the company and DVC holding 10%.

With assistance from power developers including NTPC, SJVN, and DVC, power sector financiers PFC and REC are separately attempting to establish a project management company that will compete for stressed power assets.

For feedback and suggestions, write to us at [e-mail]