Actis drops its plan to buy Essel Infra’s solar assets
MUMBAI: Private equity investor Actis LLP has scrapped its plan to buy the solar assets of debt-laden Essel Infraprojects Ltd, two people aware of the development said.
Subhash Chandra-promoted Essel Infra has now initiated talks with ACME Solar Holdings Ltd to sell the same solar energy assets, said the first of the two persons cited above, both of whom spoke on condition of anonymity.
The potential deal with Actis had an estimated value of ₹4,700 crore for 685 megawatts of Essel’s installed and under-construction projects. ACME, however, is also hoping to acquire, as part of this deal, Essel Infra’s 25-year concession agreement with the Gujarat state water utility, Gujarat Water Infrastructure Ltd, to build and operate a ₹1,000 crore water desalination plant in the Jodiya district in the Gulf of Kutch, the first person said.
“Essel would prefer to close the sale of its assets by the end of the financial year so as not to miss a payment deadline,” the first person said. In 2016, Mint had reported that Essel Infra raised $132 million (₹900 crore at the time) from Piramal Enterprises and its Dutch partner, APG Asset Management. Certain non-convertible debentures (NCD) issued to the two lenders are due for their annual payments on March 31, according to Essel Infra’s debenture prospectus filed with the Registrar of Companies. This was part of a ₹300 crore privatelyplaced NCD issue in March 2016. Piramal Enterprises and APG are also lenders to ACME Solar.
A spokesperson for Piramal Capital and Housing Finance said, “The principal outstanding under the facility to Essel Green Infra is ₹220 crore. Essel Green Infra currently has a portfolio of approximately 700 MW of solar assets across multiple subsidiar- ies, the value of which acts as security for our outstanding exposure. There is interest payment of ₹15.5 crore that is due in the next 90 days. No principal repayment is due. The management of Essel Infra has been looking to monetise their solar portfolio and we understand that multiple parties have been evaluating the same.”
“ACME is one of our preferred partners in the renewable energy space and we have extended multiple facilities for project finance over the last three years, with a total exposure of ₹1,079 crore. Primary security for the same is a 2x cover on an identified operating portfolio of the group. ACME has recently pre-paid ₹52 crore ahead of schedule,” the spokesperson added. A spokesperson for Essel Infra said the company “is in advanced dialogues with all prospective partners for the sale of its solar business and the process is in steady progress and in line with the set timelines.”
“At this stage, due to the confidentiality agreements, with multiple prospective partners, the company cannot comment on any additional details. When the deal reaches at an advanced and appropriate stage, the company will officially communicate all the details,” the spokesperson said. A spokesperson for Actis declined to comment.
Nikhil Dhingra, chief executive, ACME Solar, said in an email, “We aren’t in talks with Essel Infra or others to acquire its solar projects. We are focused on organic growth and are focused on improving yields from our existing 2.5 GWp (gigawatt peak) operational portfolio and executing around 700MW till December.”
Essel Infra had put its solar assets on the block in early 2018 and has spent most of the year negotiating with potential buyers. At first, it had come close to clinching a deal with Greenko, backed by Singapore’s GIC and Abu Dhabi Investment Authority. In November, talks with Actis had been in advanced stages till the latter got cold feet last month.
Last month, The Wire had reported that the Essel Group was allegedly linked to a company that had been under the scanner of the Serious Fraud Investigation Office (SFIO) for its role in accepting large deposits during demonetisation. The company later informed stock exchanges that the SFIO had made queries in July/August 2018 regarding this link, the requisite information was provided and the matter was closed.