Lagadapati’s Lanco Group becomes Bankrupt, Opts CDR

lanco-lagadapatiAccording TV9 detailed report , Congress former MP Lagadapati Rajagopal’s companies Lanco group is going for Corporate Debt Restructuring . Lanco Group has 275 crore worth shares .

Lanco group has over 25 companies and has the presence in EPC contracts, power, solar, mining and infrastructure, has debts of 39,191 crores . The networth of Lanco in 2014-15 is minus -447.77 crore. Lanco has the habit to take loans from banks and leave the project in incomplete stage. It has to clear at least 2500+ crore debt with this financial year.

With financial overheads the company is planning for corporate debt restructuring. With the new formula the company has to give 454 crore worth shares to the financiers. With this banks will get 65% share in Lanco group and the promoter share in the company will fall to 23%. Lanco has show 2036 crores loss in the 2014-15 financial year. It has also sold the property in Udupi .

According to Analyst, The need for a corporate debt restructuring often arises when a company is going through financial hardship and is having difficulty in meeting its obligations. If the troubles are enough to pose a high risk of the company going bankrupt, it can negotiate with its creditors to reduce these burdens and increase its chances of avoiding bankruptcy.