IL&FS to sell wind portfolio to GAIL in Rs4,800-cr debt resolution

Debt-laden Infrastructure Leasing and Financial Services (IL&FS) has agreed to sell its 874 MW operational wind portfolio to state-run gas utility GAIL (India) Ltd for Rs4,800 crore in the first debt resolution since the group went burst last year.

GAIL’s offer of Rs4,800 crore would completely wipe out the Rs3,700 crore debt on the wind power SPV. The equity value on these assets will be Rs1,100 crore.
The sale will close in three weeks, IL&FS said in a statement on Monday.
The sale is subject to various approvals, including from a foreign equity partner in the assets and company law tribunals. Another 104 MW of under-construction wind power project, a solar power portfolio of 300MW and renewable energy EPC (engineering, procurement, construction) business will not be part of the deal. A spokesperson for IL&FS said a separate sale process is on for the residual renewable energy businesses.
The sale process kicked off in November with an invitation for expressions of interest (EoIs). Although the wind portfolio received 22 EoIs, there were fewer binding bids. At the end of the bidding process, GAIL emerged as the highest bidder for seven operating wind power plants with a total generation capacity of 874MW at an average tariff of ?5 per kilowatt hour (kWh).
The proposal was unanimously approved by the committee of creditors of IL&FS Wind Energy Ltd (IWEL), the majority owner of the SPVs. The company said it is engaged with ORIX Japan, which owns 49 per cent stake in the wind portfolio and has a first right of refusal on the sale if valuation doesn’t match previously agreed expectations.