Piramal Enterprises enters fray for Lanco Infra assets

Piramal Enterprises, led by billionaire Ajay Piramal, is betting big on the infrastructure sector and ET NOW learns that the diversified company has entered the race to pick up a stake in debt-ridden Lanco Infra's thermal power portfolio, four individuals familiar with the development told ET NOW on the condition of anonymity. ET NOW was the first to report the development.

"Preliminary talks have been initiated between Lanco Infra which is looking at inducting strategic investors to reduce its debt & the structured investment group of Piramal Enterprises which falls under Piramal Capital. A few overseas distressed asset funds are also interested in the portfolio. On completion and on a fully operational basis, the enterprise value of the 6 power plants of Lanco Infra is estimated between Rs 42,000 crs to Rs 45,000 crs," said one of the two sources cited above .

Piramal Capital is the financial services arm of Piramal Enterprises. Lanco's thermal power portfolio has a total capacity of around 7256 MW and the company's debt burden as of 31st, March, 2015 stood at Rs 37,526 crores.

" Lanco Infra is looking at carving out its thermal power assets into a separate holding company and then sell a 51% stake in the entity. They are looking at initially raising capital for operational assets and use the initial deal proceeds to revive the rest of the portfolio," according to the other three sources cited above.

" In the thermal power segment, buyers are looking at cherry-picking operational assets," says Jatin Aneja, National Practice Head, Projects & Projects Finance, at law firm Shardul Amarchand Mangaldas.

In response to queries from ET NOW, Piramal Enterprises responded saying, " as a company policy, we do not comment on market speculation." while a Lanco spokesperson could not be reached for a comment.