The beleaguered Andhra Pradesh origin LANCO, based in Gurgaon has opened negotiations with prospective buyers for selling off its Udupi Power Corp Ltd in Karnataka as part of its exercise to reduce its debts.

Aiming for a valuation of around Rs 3000 crore for the plant, LANCO is said to be wanting to get the plant off its books as it’s based on imported coal, costs of which have become prohibitive. It has recently announced that it would be selling its 70 MW Budhil Hydropower project and two other plants of 5 MW each in Himachal Pradesh to Hyderabad based Greenko Energies Ltd for around Rs 650 crore. LANCO’s plans to sell off its assets forms part of the debt restructuring programme and agreements it has entered into with its creditors. Earlier attempts to reduce debts by selling part of its assets had not met with the response the company desired.

Lenders of LANCO, had cleared a proposal to restructure a sum of Rs 7700 crore for offsetting the company’s debt. This has a two year interest holiday built in. Further, a loan of Rs 2500 crore is likely to be extended by the banks to LANCO.