Malaysian company 1 MDB & JSW Energy is leading the race to acquire Lanco’s UPCL power project based at Karnataka.
1MDB is a strategic development company owned by the Malaysian Government and the 2nd largest independent power producer in the Southeast Asian country. The company has come forward as a leader to acquire Lanco Infratech’s 1,200 MW Coal-fired power plant at Udupi in Karnataka.
The transaction valued in excess of USD 1 billion is hovering to be the largest thermal power asset sale in the country and will help Lanco from cash strapped. Lanco’s debt was taken for building power plants and roads and to purchase overseas Coal mines.
1MDB is jostling with JSW Energy, which has aggressively revived its interest in the coastal project after its first round of advance negotiations with Lanco’s top brass fell through in early 2013.
JSW’s already have presence in Steel & Energy sector in the state, the acquisition of UPCL will helps JSW Group to further consolidate its presence in Karnataka. It already has an 860 MW power plant and a 10 MnT steel plant in Vijaynagar. UPCL project has long been on the radar of Jindal himself.
The UPCL power project is attractive to strategic buyers as any hike in fuel costs can be entirely passed on to buyers. Lanco has an agreement with five power distribution companies in Karnataka to sell 90% of its production and the remaining 10% to Punjab State Power Corporation. It also owns a jetty at Mangalore port to import Coal for the plant.
– Sourced
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