The Tata Power Company is working on a range of initiatives that will cut debt in half, and reduce losses at Mundra power plant, chairman N Chandrasekaran told shareholders at the annual general meet on Thursday. Tata will also sell non-core and coal assets overseas, Mr Chandrasekaran added.

The Tata group utility, which along with its subsidiaries and joint venture companies has an installed capacity of 12,742 megawatts, aims to cut debt and the shareholders approved a rs 2600 crore preference share issue to promoters Tata Sons.

“We will end this year with a debt of around Rs 25,000 crore, bringing down the debt- to-equity ratio of the company to close to 1. This will also move the net debt to earnings before interest, tax, depreciation and amortization ratio to closer to 3, significantly strengthening our balance sheet and lowering financing costs,” Chandrasekaran told shareholders.

In 2017, Tata Power decided to reduce its debt pile of Rs 49000 crore in half and In March, the company’s net debt was Rs 43,559 crore. “We have a clear plan to achieve our target by the end of this fiscal year,” the chairman said.

Tata plans complete sale of the balance non-core asset to raise nearly Rs 1,500 crore- Rs 2,000 crore during this year. It will also restructure its renewable energy business by transferring it into an infrastructure investment trust.

The chairman said that subsidiary Coastal Gujarat Power (CGPL), which runs the 4,000 mw ultra mega power project, continues to be a drag on the financials and may require further support. “While a number of discussions have happened with the five state government procurers, it is unfortunate that we do not yet have clarity on a resolution. However, for now, we see some relief from lower coal prices,” he said.

Tata Power was in talks with the state power distribution companies that buy power from its loss-making Mundra unit for revision in tariff but the pact has not been finalised yet.