2 Lanco Infra project loans may turn NPA

Dena Bank expects loans to two power projects of Lanco Infratech to slip into the nonperforming asset category in Jul-Sep, two sources told Cogencis. One of the projects is operated by its subsidiary Lanco Vidarbha Thermal Power Ltd and the other by Lanco Mandakini Hydro Energies Pvt Ltd. While the companies' loan repayments are still not due, delay in achieving the stipulated timelines for the stages of the project have led to default in the interest payments. Lanco Infratech was one of the 12 accounts identified by the Reserve Bank of India for referral under the bankruptcy code. A consortium of banks has filed a case against the company in the National Company Law Tribunal on Aug 7.

The lenders, led by IDBI Bank, had filed the case for the company's debt worth 443.65 bln rupees. As on Mar 31, the total outstanding debt of the thermal power project to banks was 29.78 bln rupees, and to other financial institutions was 6.43 bln rupees. The total debt of the hydro-electric project to banks was 6.23 bln rupees.

Dena Bank has exposure of 1.65 bln rupees to the thermal power project, and 910 mln rupees to the hydro-electric project. Chairman and Managing Director of Dena Bank Ashwani Kumar, in a recent interview with Cogencis, had said the lender expects slippages of about 4 bln rupees in Jul-Sep. The 83.46-bln-rupee Lanco Vidarbha Thermal Power also has unpaid interest amounting to 1.48 bln rupees as on Mar 31.