Crisis-hit IL&FS puts wind energy assets on the block

NEW DELHI: Crisis-hit Infrastructure Leasing and Financial Services Ltd (IL&FS) has put up the assets of IL&FS Wind Energy for sale and mandated HSBC to find a buyer, two people aware of the development said.

The 775 megawatt (MW) wind energy project portfolio, with an estimated value of around ₹4,500 crore, has been on the block for about a month. Last week, the government dissolved the board of IL&FS and appointed a sevenmember board, led by Uday Kotak, managing director and chief executive of Kotak Mahindra Bank.

The process to sell one of India’s largest wind energy platforms was initiated after a plan to merge Orient Green Power Co. Ltd’s (OGPL) wind power business with IL&FS Wind Energy fell through. This comes against the backdrop of uncertainty over debt-laden IL&FS’s capital-raising, restructuring and asset monetization plans.

“The assets have been up for sale for more than a month now. Even as the government has stepped in, they will have to sell assets to take care of the debt that has been raised,” one of the two people cited earlier said, requesting anonymity.

At the consolidated level, the IL&FS group has ₹91,091 crore of debt.

The second person, who also didn’t want to be identified, confirmed the development, add-

ing, “IL&FS Wind Energy is back on the market for sale.” The person added that its sale has been contemplated post the failed merger with OGPL.

It is possible though that all old deals may be put on hold and may even be reviewed. With the Serious Fraud Investigation Office involved, valuations might change and there is the possibility of a probe into past deals.

Mint reported on May 8, 2017 that the merger between IL&FS Wind Energy and OGPL might come unstuck because of a new provision that mandates payment of long-term capital gains tax on share sales where securities

transaction tax (STT) has not been paid. While the merger announcement for 1.2 gigawatts (GW) of operating assets was made in January 2017, tax implications arose due to changes pertaining to STT announced in the budget on February 1.

While queries emailed to an IL&FS spokesperson late on Wednesday evening remained unanswered, an HSBC spokesperson also declined to comment.

India’s wind power tariffs plummeted to ₹ 2.43 per kilowatt-hour (kWh) at an auction conducted by state-run Gujarat Urja Vikas Nigam Ltd last December.