Lanco has picked up 74% equity in the 1,015 mw coal-fired thermal power project that has been hanging fire for a decade now.
HYDERABAD: The Nagarjuna Group has given up control of the Rs 4,300 crore power plant in Mangalore to the Hyderabad-based Lanco Group.
Lanco has picked up 74% equity in the 1,015 mw coal-fired thermal power project that has been hanging fire for a decade now.
Lanco will bring in Rs 962 crore towards its share in the equity over a period of time, Praveer Sinha, chief operating officer, Nagarjuna Group, said.
There had been other suitors, too, for the Nagarjuna Power with the most prominent being the Jindals whose offer was turned down by the group early this year.
According to industry sources others in the line up included Malaysian companies Ranhill Bhd, Genting Bhd, Tenaga National Bhd and Suez Energy of Europe. However, an agreement could not be reached with these parties for various reasons, the sources said.
As to the reason for hiving off the majority stake in the project, which is at an advanced stage of implementation, Sinha said the group, which is also implementing an ambitious 6 million tonnes per annum refinery project at Cuddalore in Tamil Nadu, did not have the requisite funds to put into the power project.
“Therefore it felt it had to offload equity,” he added.
The Cuddalore refinery, which, too, has been under implementation for almost a decade now, is slated to cost Rs 4,500 crore.
L Madhusudhan Rao, chairman, Lanco and Nagarjuna Group chairman K S Raju signed an agreement in Hyderabad formalising the strategic relationship.
The power project will be jointly established by both the companies, with Nagarjuna, which had promoted the project in 1996, as a minority partner with a 26% equity.
The financial closure is slated to be achieved by September 2006 and will go commercial by by 2009, the Lanco group said on Tuesday.
The project is the first independent power project in the country to operate on imported coal but had to go through a lot of initial difficulties on account of environmental objections from the locals and other reasons.
The Nagarjuna Power Corporation Ltd, as the Mangalore project firm is called, has a power purchase agreement with the five electricity supply companies in Karnataka for the off-take of 90% of power from the project, while it has obtained various approvals with a “mega power project” status from the Government of India.
The Lanco Group is currently implementing power project with a total capacity of over 2,000 mw in thermal and hydropower sectors.
The group is also present in other infrastructure development and is currently in the process of setting up an information technology Park in Hyderabad.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}