Indian construction company Lanco Infratech Ltd has initiated restructuring debts amounting to INR 75 billion (US$1.3 billion), as a result of economic constraints weakening the performance of power, engineering and construction sectors.
Lanco Infratech, an Indian business conglomerate involved in several sectors, provides power, constructs residential and commercial infrastructures and builds roads. It has started approaching banks for the restructuring process, said a statement released by the company on Saturday.
If process gains approval from lenders, Lanco Infratech would be the second company in nine months to pursue massive loan restructuring. Suzlon Energy, a wind turbine manufacturing company, had already moved to restructure INR 110 billion worth of debt in November 2012. The debt restructuring would involve Lanco Infratech as a separate unit and would not affect any of its associates, including Australian Griffin Coal Mining Co. which it acquired in 2011.
"The current adverse macro-economic situation that has been prevailing in India since last 12 months has affected the performance of LITL's EPC business as well as the subsidiary business," said Lanco, regarding their procurement, engineering and construction business. "We expect this situation to remain for another 18 to 24 months time."
Lanco reported a total debt of INR 336 billion by the end of March, posting a series of losses in the last two financial years.
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