KSK Power urges need to 'reconsider business approach'

KSK Power Ventures said it was urgently reconsidering its business approach and needed to "explore alternative solutions" at each of its assets to preserve long term value.

Operating profit increased and losses decreased primarily due to the de-consolidation of Sai Wardha and VS Lignite assets as control was taken by respective project lenders, which the company said was "to mitigate the short term challenges as well as achieving an appropriate long term comprehensive debt resolution plan at these projects".

KSK chairman Thiruvengadam Sankar said, "The period under review witnessed the continuation of the prolonged period of challenges and uncertainty across the Indian power sector as a whole and the various operating power plants of the group in particular."

"Further, the developments at Sai Wardha and VS Lignite highlight the requirement of the group to reconsider its business approach and explore alternative solutions and equity collaborations at each of the group's assets to preserve long term value," he added.

In the six months leading to 30 September, KSK reported a pre-tax loss of $82m, compared to the $117m it had posted at the same time a year earlier, despite revenue slipping 7% to $292m.

Operating profit jumped to $80m from $51m throughout the period, at the same time as general and administrative costs improved from $32.6m to $21.7m and finance costs dropped from $178.2m to $167.4m.

The group pointed out that its KSK Mahanadi coal-based project, its flagship programme, produced 3,311 gigawatt hours of its total 4,278 gigawatt hours of energy generated.

As of 1400 GMT, shares had fallen 15.59% to 33.34p.