J. Suresh Kumar, chief financial officer at Lanco Infratech Ltd., quit India’s largest non-state power producer, becoming the second top executive at a local generator to resign this month amid losses.
Lanco, controlled by billionaire L. Madhusudhan Rao, named T. Adi Babu as the financial controller and Philip Chacko as the head of investor relations to replace Kumar, who will leave on Dec. 15, according to a statement to stock exchanges. Lanco reported a loss of 2.6 billion rupees ($50 million) for the three months ended Sept. 30, its first in at least four years.
Kumar’s resignation follows that of Lalit Kumar Gupta, who quit as chief executive officer of JSW Energy Ltd. yesterday after the company posted its first loss since its initial share sale last year. Rising borrowing costs at home are compounding problems for generators faced with increasing fuel prices. Lanco is seeking to raise yuan loans by March as part of a $3.6 billion borrowing plan to finance three generation projects.
“It’s difficult to link the sector’s problems to company turnover, but they are becoming company problems and high level exits only compound them,” said Charudatta Palekar, principal consultant at PricewaterhouseCoopers. “The sector is facing some unexpected problems: international coal pricing, domestic financing and interest rates.”
Lanco, based in Gurgaon near New Delhi, fell 3.6 percent to 12.15 rupees in Mumbai today, its biggest drop in almost two weeks. JSW Energy, which reported a quarterly loss of 1 billion rupees, lost 2.1 percent to 41.25 rupees.
Lanco, which acquired Australia’s Griffin Mining Co. earlier this year, is in talks for the yuan loan from Export-Import Bank of China, K. Raja Gopal, chief executive officer of Lanco’s power unit, said in an interview in September.
The generator’s total debt stands at 190 billion rupees, a fivefold increase since 2007, according to data compiled by Bloomberg.
Revenue from Lanco’s power business fell 26 percent to 9.9 billion rupees last quarter, primarily due to lower sales in power trading, it said in a statement on Nov. 11.