Lanco plans to form holding company for its power projects

Mumbai: Lanco Infratech, the flagship company of the Hyderabad-based Lanco Group, said it is in the process of forming a holding company to bring all its power projects under one roof.

'We have appointed PricewaterhouseCoopers to restructure the power business. A report from them is expected in a month,' Venkatesh Babu, managing director, Lanco Infratech, said. He said the move would reap financial and operational benefits for the Hyderabad-based company.

Lanco Infratech has a portfolio of around 600 mw and this will double in the current year, according to Babu. The company has an ambitious target of generating 13,000 mw power by 2013. 'We have already received financial closure for 6,000 mw,' Babu said.

Asked whether the holding company would be listed on the bourses, Babu said that could wait since the company has enough funds for projects in the next one and a half years.

'We may look at listing the company thereafter. But that will not happen before the first or second quarter of the next financial year,' Babu said.

Lanco has power projects across the country, encompassing both conventional and non-conventional fields such as gas, coal, biomass, hydro and wind.

Babu said Lanco Infratech is looking for some coal mines abroad, but nothing has been finalised yet.

Lanco had won the Sasan Ultra Mega Power Project (UMPP) along with its partner Globeleq. But that was subsequently disqualified as Power Finance Corporation (PFC), the nodal agency that awards UMPPs, found some anomalies in the submission made by Globeleq.

Lanco has partnered with Genting of Malaysia and submitted the Request for Qualification (RFQ) for the Tilaiya UMPP coming up in Jharkhand. Genting has five listed entities with a combined market capitalisation of $24.8 billion as on December 31, 2007.

Firm to raise $200 mn: Lanco Infratech today said it is in talks with a couple of overseas private equity palyers to raise $200 million (about Rs 820 crore) for its realty business.

'We are in discussions with a couple of private equity players abroad to raise up to $200 million for our realty business,' Lanco Infratech Managing Director Venkatesh Babu said.

The deal could materialise in the next six months, he added. Lanco Infratech, the holding company for the Lanco Group's power, realty and infrastructure projects, is developing a township in Hyderabad over an area of 20 million sq ft entailing an investment of Rs 6,500 crore.

It would also develop another township in Chennai on five million sq ft for which it has already acquired land. Work on this Rs 1,500-crore project is expected to start in the next six months, he said.

Babu said the company is also looking at opportunities for developing townships in Bangalore and Gurgaon.

'These are, however, at nascent stages. We are, in fact, presently talking to potential sellers of land in these areas,' he said.

Asked whether Lanco Infratech has plans to list the realty business in the near future, Babu said the company would like to create a sizeable portfolio before going public.

'We always wanted to be a niche player in the field and want to develop signature properties. Our aim is to be one of the 10 players in the country by 2015,' Babu said.