(Recasts with company confirmation, changes debt figure in first paragraph, adds details)
By Neha Dasgupta
MUMBAI, July 27 (Reuters) - India's Lanco Infratech Ltd has started a process to restructure debts totaling 75 billion rupees ($1.3 billion) after economic weakness impacted the performance of some of its businesses such as power and engineering and construction.
If the process is approved by its lenders, Lanco would be the second debt-laden company to go for a major loan restructuring within nine months, after lenders to wind turbine maker Suzlon Energy in November agreed to restructure about 110 billion rupees of its debt.
Lanco, which produces power, builds roads and constructs residential and commercial buildings, has asked banks to restructure the debt, a company statement said on Saturday.
The Business Standard newspaper earlier said Lanco had started discussion with its bankers to restructure debt worth 90 billion rupees.
The company, which acquired Australia's Griffin Coal Mining Co for about $760 million in 2011, said the debt restructuring would involve Lanco Infratech as a standalone unit and would not impact any of its units including the Australian business.
Banks bring cases to the so-called corporate debt restructuring process to negotiate relaxed repayment terms with struggling borrowers.
Many lenders have expressed worry about loans to the power, commercial real estate, construction, aviation, textile and metals sectors, which are among those hardest-hit by slowing growth and sluggish policymaking that has deterred investment.
"The current adverse macro-economic situation that has been prevailing in India since last 12 months has affected the performance of LITL's EPC business as well as the subsidiary business," the company said referring to the engineering, procurement and construction business.
"We expect this situation to remain for another 18 to 24 months time," it said, adding the restructuring process will help Lanco to complete its ongoing projects on time.
Lanco, which had total debt of 336 billion rupees as of the end of March, posted losses in the last two financial years, as the weak Indian economy, growing at its slowest in a decade, hit infrastructure investment.
Project bottlenecks, largely because of problems in acquiring land, and high funding costs, have also sapped investment in the infrastructure industry in Asia's third-largest economy. ($1=59 rupees) (Writing by Sumeet Chatterjee; Editing by Robert Birsel and David Holmes)