Lanco Infratech (LITL), the leading integrated infrastructure player in the country today announced that it has successfully completed the sell-off of its Udupi power plant to Adani Power, making it the largest acquisition in India in the thermal power space. The transaction was announced in August 2014, as part of Lanco’s debt restructuring strategy.

Udupi has set up 2 X 600 MW imported coal based power project in the Udupi District in the state of Karnataka. It is the country’s first independent power project that is based on 100% imported coal with a captive jetty of 4 million tonnes per annum and an external coal handling system in the new Mangalore Port Trust. The plant’s facility can be expanded as Udupi has already signed an agreement with the Karnataka Government for further expansion of the capacity by 1,320 MW.

Following the completion of the transaction, Lanco Infratech has realized the enterprise value of around Rs 63 billion by reducing long term debt and realizing its equity value. The deal helped Lanco to reduce its debt position-long-term and short term debt now at Rs 42.75 billion and Rs. 2,147 respectively-and boost cash flow keeping in mind the initiatives being taken and the plans being charted out by the new government in order to revive the distraught power sector.

As at Q3 FY14-15, LITL reported, its EPC division has an order book of Rs 294.63 billion. This transaction will support LITL in reducing its debt and infuse capital in other projects including Lanco Amarkantak Power. LITL is committed to drive up its EPC business, which will enhance the top-line growth of the company.

Currently, Lanco has 3450 MW assets operating in various states in the country and 4636 MW is under construction at various stages. They have around 7,000 MW capacities under development and some of these assets have coal blocks and 100 % regulated tariff. LITL has laid out a plan whereby it will look at more such strategic sell-offs like Udupi to streamline its operations and strengthen the core of its business.

Shares of the company declined Rs 0.24, or 4.34%, to settle at Rs 5.29. The total volume of shares traded was 1,002,001 at the BSE (Monday).