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Lanco Infratech Ltd. (LANCI), the Indian power producer, is seeking buyers for a real estate business it values at 27 billion rupees ($483 million), said a person with direct knowledge of the matter.
The company has asked investment banks to submit proposals to manage the sale, said the person, who asked not to be named as the details are confidential. Assets for sale include a 100- acre (40 hectare) residential and commercial property called Lanco Hills in the southern city of Hyderabad, the person said.
Lanco, with net debt of 266 billion rupees as of March 31, is seeking to exit peripheral businesses and focus on power as India pushes to increase generation capacity. The company also plans to raise as much as $750 million by selling a stake in its power business, according to the person.
“Real estate is a non-core asset and we are not looking at building our project pipeline in this segment,” Philip Chacko, director for investor relations at Lanco, said in an interview. He declined to comment on the sale or valuations.
Shares in Lanco have rallied 68 percent this year, giving the company a market value of 38.4 billion rupees. Lanco had 14.1 billion rupees of cash at the end of March, data compiled by Bloomberg show.
Lanco Hills, primarily a residential township, has plans for offices, hotels and one of the world’s tallest residential towers, according to the development’s website. In May, India’s Supreme Court overruled a lower court decision that had stopped the company from selling the properties to third parties. Lanco said the ruling removed “all hurdles towards the development of the entire project.”
Lanco, which has another 50 acres of land under development in Chennai in southern India, is seeking 20 billion rupees for the Hyderabad property and 7 billion rupees for the Chennai assets, the person said.
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