The company spokesperson said bids for renewable assets have been received and are being processed.
Mumbai: Gail IndiaNSE -0.60 % is the front -runner to buy the energy assets of troubled Infrastructure Leasing and Financial Services, two persons in the know of the development, said. The assets on the block could fetch Rs 6,000 crore for IL&FS and include a controlling stake in the wind power generating plants with an aggregate capacity of 873.5 MW and those under construction with a combined capacity of 104 MW. Solar power plants and projects under development of about 300 MW is also up for sale.
“Gail India is the front-runner to buy energy assets while Japanese investor Orix reserves the right of refusal to buy the stake if the valuation falls below a particular price,” said a source close to the development. Orix owns 49% in the energy assets up for sale.
Though the company received 22 expressions of interest from investors, including Global Infra partners, KKR, Brookfield, I Squared Capital and Macquarie to buy over 1,000-megawatt renewable energy assets, response in terms of binding bids were poor. The company was expecting to get Rs 6,000 crore to Rs 8,000 crore from the sale of energy assets.
“The approximate value of the asset is around Rs 6,000 crore and the deal will help pare debt by Rs 5,000 crore,” said another source.
The company spokesperson said bids for renewable assets have been received and are being processed.
Ashwini Kumar, head of energy business, had said that the energy business is a green business, which is paying off everything. Though they are performing assets, the response to the sale has been relatively poor.
“The wind and solar power projects remain highly cost competitive against conventional sources and would continue to increase their share in the generation mix over the next few years. As per ICRA estimate, the share of renewable energy in the generation mix is expected to increase to 12-13% by FY22 from 7.7% in FY18,” said Sabyasachi Majumdar, group head — corporate ratings, ICRA
The subsidiaries are part of the resolution plans for IL&FS Group. Arpwood Capital and JM Financial are the financial and transaction advisors while Alvarez & Marsal is the resolution consultant. The IL&FS group submitted a progress report to courts categorising assets into three categories; red, green and amber. IL&FS has been looking to sell stakes in subsidiaries and pare its debt. The company has debt of Rs 91,000 crore.
Source: economictimes.indiatimes
