IL&FS completes sale of wind energy assets to Orix

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SME Times News Bureau | 17 Oct, 2019
In a major development in the resolution of the crisis-hit IL&FS and its group entities, IL&FS on Thursday said that it has completed the sale of its wind energy assets to Orix Corporation of Japan for Rs 4,900 crore, helping the debt ridden company to resolve its debt of over Rs 4,300 crore.

In a statement IL&FS said: "IL&FS completes sale of its 51 per cent stake in seven SPVs (special purpose vehicles) under Wind Energy Assets portfolio to Orix Corporation of Japan. The transaction marks the completion of first set of resolution under the new board."

The seven operating wind power SPVs, with 874 MW of generation capacity, were held under IL&FS Wind Energy Ltd, a subsidiary of IL&FS.

"Transaction resolves debt of over Rs 4,300 crore -- Rs 3,537 crore (as on October 15) of debt in SPVs transferred, IL&FS gets cash of Rs 592.87 crores for its equity and Rs 216 crores for its debt in these SPVs," the statement said.

IL&FS said that the proceeds towards stake sale have been duly received and share transfer has completed completed. Orix now is the 100 per cent owner of the wind assets and the board of these underlying companies have been reconstituted with Orix nominees.

The amount has been received in the escrow accounts of ILFS Group companies, IWEL and IEDCL, as per the order of the National Company Law Tribunal (NCLT).

The sale to Orix Corporation completes resolution of the the seven SPVs of the IL&FS Group -- Lalpur Wind Energy Private Limited, Etesian Urja Ltd, Khandke Wind Energy Pvt Ltd, Retadi Wind Power Ltd, Wind Urja India Pvt Ltd, Tadas Wind Energy Pvt Ltd and Kaze Energy Ltd.

The transaction completed in about 11 months, in a multi-stage process ranging from approvals of the new board under Uday Kotak to, the Committee of Creditors (CoC), Justice (retd) D.K. Jain and and the NCLT.

Orix initially had 49 per cent stake in the wind energy assets. In the bidding process for the rest of 51 per cent stake, GAIL emerged as the highest bidder with an offer of Rs 4,800 crores for 100 per cent of enterprise value.

Later, Orix expressed its intent to buy out IL&FS's 51 per cent stake in IL&FS Wind Energy Ltd (IWEL) through exercising its right under the terms of an existing MoU enabling Orix to match the price offered by the highest bidder for purchasing the said stake.

Orix then offered an 100 per cent enterprise value of Rs 4,900 crore. Enterprise value demonstrate zero haircut for all lenders Power Finance Corporation, Bank of Baroda and India Infradebt.

The new board had approved the sale of these SPVs to ORIX in its board meeting held on June 28, 2019.