- Lanco Infratech Ltd is an Indian conglomerate involved in power, infrastructure, property development and natural resources. It has faced significant financial troubles in recent years. - In 2013, 75% of Lanco's lenders agreed to a Corporate Debt Restructuring plan to restructure Rs. 7,700 crore of debt, but 24% of lenders opted out of the plan and want to exit their exposure to Lanco. - The CDR plan aims to reduce Lanco's interest rates and give it a two year interest payment holiday but some lenders have concerns about additional exposure, use of funds, and the financial health of Lanco's subsidiaries.

1. EPC POWER SOLAR
NATURAL
RESOURCES INFRASTRUCTUR
MBF GROUP 7

2. CONTENT
 Company Overview
 Shareholding Pattern
 Financial Statement Analysis
 What went wrong
 CDR Scheme
 Alternate Strategies

3. BUSINESS SEGMENTS
Lanco Infratech Ltd
POWER
INFRASTRUCTURE
PROPERTY
DEVELOPMENT
NATURAL
RESOURCE
EPC

4. COMPANY OVERVIEW
 Lanco Infratech Limited is a large Indian business conglomerate
involved in construction, power, real estate, and several other segments.
 Lanco was founded, in 1986, by a businessman with entrepreneurial
acumen turned politician L Rajagopal.
 Lanco Infratech Limited became a listed entity in November 2006
following the Initial Public Offering of shares.
 Lanco's revenue from operations as on 31 March 2013 was Rs.
13,739Crores.
 From its very inception, the company was dogged in a number of
controversies. Infrastructure contracts are decided by government
departments, and there have been frequent allegations of improper
advantage given to the company.

5. SHAREHOLDING PATTERN
Category of Shareholder Total Shares %
Shares pledged or
otherwise encumbered
(A) Promoter and Promoter Group
1 Individuals / Hindu Undivided Family 21,95,19,903 9.12 9,48,59,008 43.21
2 Bodies Corporate 1,35,37,12,439 56.2 1,16,54,98,000 86.10
3 Relatives of Promoters 6,85,15,537 2.85 4,79,60,992 70.00
4 Trusts and Other Bodies Corporates 5,84,29,458 2.43 - -
Total Shareholding of Promoter and Promoter Group 1,70,01,77,337 70.6 1,30,83,18,000 76.95
(B) Public Shareholding3
1 Institutions 12,73,91,844 5.29
2 Non- Institutions 58,02,35,739 24.1
Total Public Shareholding 70,76,27,583
TOTAL (A) + (B) 2,40,78,04,920 100 1,30,83,18,000 54.34
71%
29%
Total Shares
Promoter and Promoter Group Public Shareholding3

6. COMPANY’S PERFORMANCE ON STOCK
EXCHANGE MARCH 2011

7. PROFIT & LOSS ABSTRACT...
Particulars Apr'13-Sept'13 Mar '13 Mar '12 Mar '11 Mar '10
Net Sales 1,059.07 4,741.11 8,519.00 5,794.00 5,887.00
Operating Income 1,062.29 4,822.75 8,844.00 6,032.00 6,169.00
OPBDIT 119.54 738.03 654.00 738.00 880.00
Depr & Amortisation 60.66 127.49 101.44 72.06 59.77
Financial Cost 366.75 600.32 505.12 337.74 197.94
PAT (307.87) 13.34 116.00 278.00 472.00
Net cash accruals (247.21) 140.83 217.00 350.00 532.00
ESC 239.00 239.00 239.00 239.00 239.00
Tangible Net Worth 3,632.00 3,596.00 3,427.00 3,161.00
Total Debt 4,148.40 4,221.00 3,797.00 2,734.00
Int & Finance Cost 366.75 600.32 505.12 337.74 197.94
Total Current Assets 3,752.65 3,664.41 3,875.23 3,118.67
Total CL & Provisions 12,045.77 12,668.46 8,540.72 3,406.25
OPBDIT Margine 11% 16% 7% 12% 14%
Net Profit Margine (29)% 0.03% 1% 5% 8%
ROCE (PBDIT) 9.5% 8% 10% 15%
PBDIT/Int & Finance Cost 0.33 1.23 1.29 2.19 4.45

8. INTEREST COST TREND
-
100.00
200.00
300.00
400.00
500.00
600.00
700.00
Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Interest Cost
Rs.InCr
( Amt in Crs )
Year Interest Cost Trend
Mar '09 138.61
Mar '10 197.94 43%
Mar '11 337.74 71%
Mar '12 505.12 50%
Mar '13 600.32 19%

9. REVENUE TREND
-
1,000.00
2,000.00
3,000.00
4,000.00
5,000.00
6,000.00
7,000.00
8,000.00
9,000.00
Mar '10 Mar '11 Mar '12 Mar '13 HLY -Sept'13
Operating Income
OPBDIT
Operating income in Rs. Cr.
Operating margin in %age
Amount (in Rs.)
Year
Operating
Income OPBDIT OPBDIT- Margin
Mar '10 5,887.00 880.00 15%
Mar '11 5,794.00 738.00 13%
Mar '12 8,519.00 654.00 8%
Mar '13 4,741.11 738.03 16%
HLY -Sept'13 1,059.07 119.54 11%

10. BALANCE SHEET ABSTRACT &
RATIO ANALYSIS

11. (Rs. In crores)
Standalone Consolidated
2013 2012 2013 2012
Long Term Borrowings
Secured Term Loans
--from Banks 79.27 106.39 10443.08 10480.41
--from Financial Institutions 42.86 64.29 8628.63 7220.92
Unsecured Term loans
--from Banks (pledge of shares) 422.24 266.45 422.24 266.45
--from Financial Institutions 0.00 0.00 0.00 0.00
Foreign Currency Term loans
--from Banks 327.91 300.83 5627.20 5134.52
--from Financial Institutions 0.00 0.00 15.75 24.68
Hypothecation loans
--from Banks 0.00 10.85 0.00 10.85
--from Financial Others 15.39 39.94 15.39 39.94
Unsecured loans 200.00 200.00 0.00 0.00
Total 1087.67 988.75 25152.29 23177.77
LTB (current maturities) 658.06 828.42 2603.67 3037.49
Short Term Borrowings
Cash Credit & Working Capital 2339.76 1880.51 3519.37 2522.67
Foreign Currency loans 506.78 329.58 1441.19 1411.73
Unsecured Loans 214.20 194.00 0.00 0.00
Total 3060.74 2404.09 4960.56 3934.40
GRAND TOTAL 4806.47 4221.26 32716.52 30149.66
Outstanding Corporate Gurantees 4096.31 3481.87
Company’s Debt Structure

12. COMPANY’S INVESTMENT IN
SUBSIDIARIES
(Rs in Cr)
Industry Name of Company Equity Preference TOTAL % to CE
EPC &
CONSTRUCTION Lanco International Pte Limited 45.66 - 45.66
0.97%
EPC &
CONSTRUCTION Lanco Solar Energy Private Limited - 160.00 160.00
3.39%
INFRASTRUCTURE Lanco Kanpur Highways Limited - 186.50 186.50 3.95%
INFRASTRUCTURE Mercury Projects Private Limited - 208.42 208.42 4.42%
POWER Diwakar Solar Projects Limited 238.33 - 238.33 5.05%
POWER Lanco Power Limited 5,186.69 - 5,186.69 109.89%
PROPERTY
DEVELOPMENT
Lanco Hills Technology Park Private
Limited 222.00 200.00 422.00
8.94%
PROPERTY
DEVELOPMENT Uranus Projects Private Limited - 17.19 17.19
0.36%
RESOURCES Lanco Resources International Pte Limited 260.50 - 260.50
5.52%
RESOURCES
Mahatamil Mining and Thermal Energy
Limited - 72.72 72.72
1.54%
OTHER Others 167.50 12.29 179.79 3.81%
TOTAL 6,120.68 857.11 6,977.79 147.84%

13. COMPANY’S LONG TERM DEBT
+SHF
31.03.2013 (Rs.
In Crores)
SHAREHOLDERS' FUNDS 3,632.24
Long Term Debts 1,087.67
Total SHF & LTD 4,719.90
Investments in Subsidiary 6,977.79
% to Long term Funds 148%

14. Shareholders Funds
&
Long Term Debts
Fixed Assets
&
Investments
Short term
borrowings /Current
Liabilities
Current Assets

15. WHAT WENT WRONG...
Industry Specific:-
 Slowdown in country’s economy, low growth rate.
 The unavailability of fuel like coal, gas due to
cancellation of the coal mines allotment.
 Volatility in the prices of key commodities like steel,
cement etc.,

16. WHAT WENT WRONG...
Company Specific:-
 Lanco acquisition of Griffin coal mine in Australia, increased
debt of about Rs. 4000 crores (in foreign currency), for year
ended March 2011. But the same is in expansion mode to
increase the capacity, and is not yet fully operational.
 The company had total repayment obligation of around Rs.
800 crores in 2012-13 of which Rs. 700 crores was due in
three bullet payments in October, November 12 & January
2013, which it defaulted.
 EPC Order book includes approximately 70% of Lanco’s SPV
Power project-which are on Fixed cost bases and is thus
exposed to escalation in input Prices.

17. WHAT WENT WRONG...
 Infact Operating margin declined to less than 10% from
about 20% in previous years, shows operation
inefficiency.
 Promoters have pledged about 60% of its equity for
raising funds, and that restrict its flexibility to raise
further equity.
 Significant Investment in SPVs, in the last 2
years, which are at project stage and are not generating
any cash flows yet.
 Degrowth in company flagship vertical, EPC, as not
having enough funds to execute projects despite of
strong order book of about Rs. 23000 crores.

18. LANCO CDR APPROVAL
 Admitted in August 2013, CDR EG approved CDR on 11th
December 2013, (Cut off date being 1st April 2013)
 Restructure of Rs. 7700/- Crore of Company’s debt, out of
which R. 4400/- Crore Fund Based and Rs. 3300/- Non
Fund Based (Bank Credits & Letter of Credit).
 Additional Rs. 3500/- crore, out of which Rs. 2500/- crore is
Fund Based (New Term loan) & Rs. 1000/- Non Fund
Based. (for expansion of Griffin coal mine)
 Reduction in Interest Rates by 2.5% for first 3-4 years and
will increase to 4.5% lateron.
 CDR will give company 2 year interest holiday

19. LANCO CDR PACKAGE
 Lender Consortium will forgo a 415 crore interest due to
the company.
 Promoters to pay Rs. 153 crore before Master
Restructuring Agreement is signed.
 Lanco Infratech’s Promoters will hive off their stakes in
some of the companies & bring in Fresh funds of Rs.
500 crores, to be used to pay off non consenting
lenders.
 And has already put its Budhil Hydroelectric project on
the Block & finding investors for its solar projects.

20. Is it CDR is the right solution?
Or
Is there any thing more to do?

21. BANK WISE CDR LENDERS SUPPORT FOR CDR
SCHEME
CDR scheme agreed
S. No Bank % in Value
1 IDBI 13.03%
2 Central bank 7.06%
3 IOB 6.93%
4 ICICI 6.19%
5 Allahabad 6.13%
6 Andhra bank 5.32%
7 OBC 4.73%
8 BOM 4.43%
9 SBP 4.11%
10 UBI 3.31%
11 SBI 3.25%
12 BOB 3.05%
13 PN & Sind 2.38%
14 Canara 2.08%
15 UBI 1.35%
16 J&K 1.29%
17 SBI 0.98%
CDR scheme
agreed 75.62%
Value in Rs. Cr
No. Count 68.00%
Exit option
S. No Bank
% in
Value
1 PNB 9.46%
2 Axis 4.02%
3 Dena bank 3.87%
4 Corporation 2.26%
5 SB-Mysore 2.08%
6 ING Vysya 0.92%
7 LIC 1.08%
8 SB-B&J 0.69%
CDR - exit
option 24.38%
Value in Rs. Cr
No. Count 32.00%

22. CONCERNS RAISED BY 24% OF CDR LENDERS
Punjab National Bank (Exposure: 9.46%): Agreeable subject to:
 Not agreeable for additional exposure & opting for exit route. (This is
the main reason of all other CDR lenders who opt for exit
(Axis, Dena, Corporation, SBI Mysore, ING Vysa, LIC, SBI B&J)
 Allowing investments of Rs.1000 crore in subsidiaries during
moratorium of 2014 & 2015 is not acceptable. The same to be used
towards payment to pressing creditors since release of priority debt
is linked to sale of SPV’s/Subsidiaries.
 Out of Rs.3395 crore investment commitment of the company as
on March 2013, only Rs.1000 crore is taken care of in this package.
MI/Company to inform how the balance will met.
 The company to submit a status report on Griffin Coal Mining
working and investment commitment where Lanco Infra has given a
corporate guarantee.

23. CONCERNS RAISED BY 24% OF CDR LENDERS
Punjab National Bank
 Conversion of 20% of outstanding of priority debt into equity at a
price 20% lower than SEBI determined price is not as per norms.
 The accounts of many of the SPV’s/ subsidiaries are irregular and
are likely NPAs. Present package addresses only the issues of this
company (LITL). Since this is an EPC company for the
SPV’s/subsidiaries and 87% of its revenue from EPC business,
success of the package depends on completion of the projections of
subsidiaries/SPV’s. Hence a holistic approach is suggested.
 BOB (agreed for CDR) - Company to bring all their SPVs into the
ambit of CDR Package since the holding company is same or to take
their equity back from the SPVs and utilize the same for
restructuring.

24. OTHER CONCERNS – STATUTORY ISSUES
 Andhra Pradesh High Court (April 2012) Rules against Lanco
Group Ltd. Regarding Lanco Hills Project – Rs. 320 crores
 The state government allotted 108.10 acres of land out of 1,654
acres to the company, ignoring the protest of the state Waqf
board and several other Muslim organizations.
 Later the state Waqf Board Challanged with the support of TRS.
 The High Court has now ruled that the entire land of 1,654 acres
in Manikonda village belongs to the Dargah Hussain Shah Wali
and referred the matter to the state Waqf Board tribunal for
further hearing in the matter.
 The Tribunal had already ordered the stay on any construction
work by the company on the land.
 Disputed statutory liabilities (CD, VAT, Service tax, IT, SEZ &
Seignorage fees and others) of LITL group – Rs. 350 crores

25. OTHER CONCERNS -OFF BALANCE SHEET ITEMS
Corporate Guarantee to
Subsidiaries:
Subsidiary Co Rs. Crores
Udupi Power 4,901.44
Lanco resource
Australia 3,453.06
Lanco Babandh Power 2,479.24
Himavat Power 350.00
LHHL 346.85
LDHL 255.78
KEVPL 50.00
Total 11,836.37
Sale of share proceeds is
pending from 2 years from an
associate (RPPL – 45%) – Rs.
2,701 Cr.
Cash consideration – Rs.6,815 Cr
Pending receivable – Rs. 2,701 Cr
– Since 31, March 2012
No approval from lenders is taken,
Auditors have qualified
LITL
LTPL
LITL
LHPLVarious
subsidiaries
Associate – 45%WOS

26. OTHER CONCERNS – POWER PLANT
 Solar Mission (JNNSM) Ministry of Corporate Affairs, the
seven firms were apparently floated by LANCO
management in order to bypass contract conditions that
each contract be given to only one group. The total
amount of the scam may be as high as Rs. 13,000
crores
 CSE guidelines were blatantly flouted by Lanco Infratech.
This company floated front companies and grabbed no less
than nine projects worth 235 mw. This is about 40% of the
620 mw worth of projects auctioned by the government during
the first batch of the first phase of the Solar Mission
 15th Jan 2014 – SC Court order De-allocation of Rampia
and Dip of Ramia are coal block, Odisha – 645 MT –
This may be effects the supply of fuel for 1000 MW
power plant IPP in Dhenkanal (3 weeks time given to
submit the FC, EC, PL etc reports)

27. AUSTRALIAN GRIFFIN COAL MINE
 Resource - This company is based in Collie, is Western Australia’s oldest coal
company with coal resources of approximately 1.1 billion tonnes
 Benefits - Coal from Griffin caters to both the domestic Australian and export
markets.
 Investment - During 2011, USD 665 Mn (approx Rs. 4,000 cr) – Source of fund –
Debt from IDBI Rs. 4500 cr
Present status:
• It produced 3.11 MT of coal during
FY2012-13 with sales of 3.03 MT
• Capacity enhancement program
with capacity being raised from 4
MT to 15 MTPA is underway
• Further commitment Rs. 3395
crores (Rs. 1000 crore is approved
under CDR)
Particulars Rs. Crores
Capital 32.64
Reserves 3,626.70
Debt & other liabilities 4,791.07
Total Liabilites / Assets 8,450.41
Tunrover 956.42
EBDIT (bloomberg) -105.00
Interest & Amortisation -342.97
PBT -447.97
The Griffin Coal Mining Company Pty Limited
Unaudited financials as at March 2013:

28. ALTERNATE STRATEGIES
 Coal mine expansion may be rethink? If necessary
stake to sold and take necessary steps to bring the
entire money which is infused earlier
 Realize pending receivables from the RPPL – 2,701
crores
 Promoters can sell their stake in the Lanco Industries
Limited (approx 24% stake) – infuse funds to LITL (LIL
is not disclosed as related party in LITL financial
statements)
 Identify the viable projects on independent project basis
rather than merging altogether
 Company may need to consolidate all their drill down
subsidiaries into the respective segment wise holding
companies