Lanco Infratech Ltd. said it completed the sale of a 1,200-megawatt power plant to Adani Power Ltd. for 63 billion rupees ($1 billion), including debt, almost eight months after the two agreed to the transaction.
The sale of the plant, located in Udupi in southern India, will help Lanco cut its long-term debt by 42.75 billion rupees and short-term debt by 21.47 billion rupees, the company said in an e-mailed statement Monday.
Lanco’s long-term debt now stands at about 340 billion rupees, Chief Financial Officer T. Adibabu said by phone. The company’s debt swelled more than four-fold in the four years ended March 31, 2014, according to data compiled by Bloomberg.
Lanco, based in Gurgaon near New Delhi, is among Indian power producers battling rising debt as projects remain stuck because of lack of fuel or delays in land acquisitions and environmental approvals.
“We will be looking to sell more assets to cut debt,” Adibabu said. “We hope in five to six months, we will be ready to start talks to sell at least one of our running assets.”
Lanco has 3,450 megawatts of operating assets, and plants with a combined capacity of 4,636 megawatts are being built, according to the statement.
The Udupi plant in southern Karnataka state is fueled entirely on imported coal and has a captive jetty to handle 4 million tons of coal annually at the Mangalore port.
In November, JSW Energy Ltd. agreed to buy two hydropower plants of Jaiprakash Power Ventures Ltd., a unit of Formula One race track builder Jaiprakash Associates Ltd.