ORIX agrees to take control of IL&FS Wind Energy

Venkatesh Ganesh Mumbai | Updated on May 19, 2019 Published on May 19, 2019

In a move that could be of some respite for IL&FS lenders, Japan’s ORIX Corporation has agreed to take control of IL&FS’ wind energy company by buying the 51 per cent it does not own in IL&FS Wind Energy Ltd.

Earlier, GAIL Ltd had offered about ₹4,800 crore for 100 per cent of enterprise value. But being a key stakeholder, ORIX has exercised its right of first refusal (ROFR) to purchase the remaining 51 per cent in IWEL by matching GAIL’s bid.

The deal means that the lenders will not have to take a haircut on the debt of around ₹3,700 crore. Apart from the 49 per cent in IWEL, ORIX holds around 23 per cent in IL&FS Group, which makes it the second-largest shareholder.

In a statement, IL&FS said the closure of the sale to ORIX is expected by next month and that the amount received would be “held in trust for distribution to stakeholders” as per a resolution framework filed with the NCLAT proposed by the company’s government-appointed board of directors. Last November, IL&FS had invited expressions of interest for the sale of a controlling stake in its renewable energy portfolio. The portfolio comprises seven operating wind-power generating plants with aggregate capacity of 873.5MW and under-construction wind projects of 104MW. The portfolio also consists of 300MW solar projects under development by IL&FS on behalf of other corporates.

IL&FS group, which defaulted on its payments last year and owes in excess of ₹1 lakh crore, is in the process of selling some of its assets to meet debtor obligations. The sale process for assets in the areas of education, funds, domestic roads, thermal power, water infrastructure, technology and key international assets is currently underway and binding financial bids are expected for these companies/ businesses in stages by July 2019.

In October 2018, the government put in place a new management, headed by Uday Kotak, to oversee the debt resolution process.

Published on May 19, 2019
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