Brook­field, Mac­quarie, KKR in Race for IL&FS Green As­sets

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Mum­bai: Global In­fra Part­ners, KKR, Brook­field, I Squared Cap­i­tal and Mac­quarie are among the 15 large funds in the race for buy­ing over 1,000-megawatt re­new­able en­ergy as­sets of In­fra­struc­ture Leas­ing & Fi­nan­cial Ser­vices Ltd (IL&FS).

The pro­posed sale of the stake held by the IL&FS Group in these as­sets and busi­nesses is likely to garner ₹ 6,000-8,000 crore.

IL&FS had called bids for the as­set man­age­ment ser­vices unit of the wind power plants and the busi­ness di­vi­sion that de­vel­ops and im­ple­ments these projects. This in­cludes a con­trol­ling stake in wind power plants with an ag­gre­gate ca­pac­ity of 873.5 MW as well as those un­der con­struc­tion with a com­bined ca­pac­ity of 104 MW. So­lar power plants and projects un­der de­vel­op­ment of about 300 MW ca­pac­ity are also up for grabs.

The newly-con­sti­tuted IL&FS board called for ex­pres­sions of in­ter­est to as­sess the in­ter­est in its stake in the re­new­able en­ergy as­sets in Novem­ber 2018. The stake sale in sub­sidiaries is part of the com­pany’s res­o­lu­tion plans.

Bur­dened un­der a ₹ 91,000-crore debt load, the in­fra­struc­ture finance com­pany had ap­proached the Na­tional Com­pany Law Tri­bunal (NCLT) to re­solve the is­sue with cred­i­tors with­out go­ing in for liq­ui­da­tion. IL&FS has been look­ing to sell stakes in sub­sidiaries to mon­e­tise and pare its debt. It has also sub­mit­ted a plan to NCLT, look­ing to cut non-es­sen­tial ex­penses.

Ar­p­wood Cap­i­tal and JM Fi­nan­cial were ap­pointed as fi­nan­cial and trans­ac­tion ad­vi­sors. Al­varez & Marsal is the res­o­lu­tion con­sul­tant. KKR, Mac­quarie and Brook­field said they would not like to com­ment for the story, while IL&FS cor­po­rate com­mu­ni­ca­tions head Sharad Goel de­clined to com­ment.

In­dia is ex­pected to in­stall 175 giga watt (GW) of re­new­able en­ergy gen­er­a­tion plants, in­clud­ing 60 GW of wind power by 2020.

The bid­ding ac­tiv­ity in the re­new­able en­ergy sec­tor has re­mained size­able with cen­tral nodal agen­cies like the So­lar En­ergy Cor­po­ra­tion of In­dia and NTPC Lim­ited (NTPC) as well as state dis­tri­bu­tion util­i­ties is­su­ing bids for wind and so­lar power ca­pac­i­ties of about 10 GW and 15 GW dur­ing 2017 and 2018, Icra had said in a re­port.

“The wind and so­lar power projects re­main highly cost-com­pet­i­tive against the con­ven­tional sources and would con­tinue to in­crease their share in the gen­er­a­tion mix over the next few years. As per Icra es­ti­mates, 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 for cor­po­rate rat­ings at ICRA.

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