MUMBAI, July 27 Indian infrastructure builder
Lanco Infratech Ltd has started discussion with its
bankers to restructure debt worth 90 billion rupees ($1.5
billion) as a weak economy takes a toll, the Business Standard
newspaper reported on Saturday.
If the process is approved by lenders, Lanco would be the
second debt-laden company to go for major loan restructuring in
the last year after lenders to wind turbine maker Suzlon Energy
in November agreed to restructure about 110 billion
rupees of its debt.
Lanco, which produces power and builds roads, and
residential and commercial buildings in India, is looking to
restructure a part of its debt after its attempts to sell some
assets failed, the newspaper reported, citing unidentified
The company, which acquired Australia's Griffin Coal Mining
Co for about $760 million in 2011, is exploring the option, a
Lanco spokesman told Reuters, adding the possible process would
not impact any of its units including the Australian business.
He declined to give details.
Lanco, which had total debt of 336 billion rupees, as of the
end of March, posted losses in the last two financial years, as
the weak Indian economy, growing at its slowest in a decade, hit
Banks bring cases to the so-called corporate debt
restructuring process to negotiate relaxed repayment terms with
"We told the company that something needed to be done about
the huge debt, as it had exhausted all its options," a senior
state-run bank official was quoted in the Business Standard
report as saying about the possible Lanco restructuring.
Project bottlenecks, largely because of problems in
acquiring land and high funding costs, have also sapped
investment in the infrastructure industry in Asia's
Reflecting the poor economic climate, the earnings outlook
of many mid-sized and debt-laden Indian infrastructure builders
such as Jaiprakash Associates Ltd and GMR
Infrastructure Ltd has deteriorated.
Many lenders have expressed worry about loans to the power,
commercial real estate, construction, aviation, textile and
metals sectors, which are among those hardest-hit by slowing
growth and sluggish policymaking that has deterred investment.
(Reporting by Neha Dasgupta; Writing by Sumeet Chatterjee;
Editing by Robert Birsel)