Lanco Infrastructure Ltd today approved a move to issue Compulsorily Convertible Debentures (CCDs) on preferential basis to IDFC Bank, worth about Rs.350 crore.
The board of directors of the diversified infrastructure company, which met today, decided to issue CCDs of face value of ₹10 each at par on preferential basis to IDFC Bank. This is subject to necessary approvals.
It is proposed to issue securities worth Rs.350 crore with each CCD to be converted into equity shares of Rs.1 each at the end of 12 months from the date of allotment of CCDs. The conversion price shall not be less than the price prescribed under the SEBI (ICDR) guidelines.
Lanco had concluded a corporate debt restructure (CDR) with a clutch of banks, restructuring about Rs.6,500 crore in loans and Rs.3,500 crore non-fund based loans. When the CDR package was concluded, the IDFC Bank did not participate in the process, T Adibabu, Chief Operating Officer, Finance, Lanco Infra, told BusinessLine.
Therefore, the bank has now decided to convert its loan into CCDs, which get converted into equity shares after the 12-month period.
Asked about the business outlook, Adibabu said the company has managed to address some of the fuel supply and tariff-related issues for both coal and gas based projects over the past few months. This has begun to show positive results on the company performance.
“We expect the next financial year to be much better given the fuel supply and tariff arrangements for some of the thermal plants. With pooled gas supply for the stranded gas-based power plants, we expect things to get better next financial year,” he said. “The performance of power projects at Amarkantak, Anpara and Kondapalli are poised to get better next fiscal.
“The improved performance from these plants was barely for about four–five months this year. But with the Centre keen on addressing concerns of power projects, including the gas plants with pooled gas, there is clearer visibility on their performance,” he said.