ET reported that Lanco Infratech has missed its quarterly repayment of loan raised for its 1,200 MW imported coal power project at Udupi in Karnataka as the poor health of state distribution companies is taking a toll on power utilities.

Lanco Infratech's subsidiary Udupi Power Corporation Ltd was unable to make a debt repayment of 90 crore that was due on January 15, as it has not received payments totaling 450 crore from the state distribution companies in Karnataka for its first unit of 600 MW at Udupi. Also, inordinate delay in commissioning of the second unit of 600 MW has further worsened cash flows to the company.

A senior executive from Lanco Infratech said that "There has been delay in payment on outstanding of 90 crore as we have receivables due with the state discoms. We are working closely with the state government so that the issue is resolved and we have cash.”

The company had raised a loan of 4,500 crore for the project from a consortium of 15 banks led by state run Power Finance Corporation. Although the company did not reveal names of other banks, analysts said that the consortium included Bank of Baroda, Dena Bank, IFCI, Canara Bank, Bank of India, Indian Overseas Bank, Punjab National Bank, Indian Bank and IDBI. They said that ICICI Bank, Axis Bank and Rural Electrification Corporation do not have any exposure to the loan.

Mr Satnam Singh chairman and managing director of Power Finance Corporation said that "UPCL has paid all installments until now. The non payment in January is not yet a concern it takes six months to consider it as a non performing asset.”

(Sourced from ET)