The group is in a firefighting mode and in the midst of a debt repayment crisis that came to light after a media report last week alleged money laundering in one of its group companies.
Essel Infraprojects is in the final stages of discussions to sell its solar energy portfolio to private equity investor Actis, according to sources. The sale of the portfolio, totaling 685 mw of installed and under-construction projects, could fetch the company about Rs 4,500-5,000 crore, sources told FE.
Essel Infra has also been in talks for the last few months with various investors to sell its roads portfolio comprising 14 projects, including those under construction.
According to sources, most of these are state highways and collect toll under the build, operate and transfer (BOT) method and are not performing as per expectations. An investment banker who declined to be named said while the BOT projects would be sold at a discount, the company has three road projects that receive annuity payments which will be attractive to investors due to their assured revenues from the government. Essel Infra also has an annuity railway project on the Eastern Freight Corridor connecting Howrah and Chennai.
Both Essel and Actis did not respond to emails seeking comment. In their renewable portfolio, Essel also has 163 mw of hydro power and 560 mw of wind power. In October 2018, Essel had announced the sale of four transmission line businesses to Edelweiss-backed Sekura Energy for an enterprise value value of Rs 6,000 crore.
FE had exclusively reported on November 28, 2017 the company’s failure to raise funds from Goldman Sachs as the Wall Street banker withheld the second tranche of the $220-million financing it had committed to Essel Highways, an arm of Essel Infraprojects.
According to sources whom FE spoke to at the time, the investment bank was unhappy with the progress of projects on the ground after it initially disbursed $85 million in mezzanine financing.
Essel Infra is part of media baron Subhash Chandra’s Essel Group, which owns the Zee network of television channels encompassing various genres, including a number of national and regional news channels. Essel also has a packaging business called Essel Propack, which is the largest specialty packaging manufacturer of laminated plastic tubes, catering to the fast-moving consumer goods and pharma industries.
The group is in a firefighting mode and in the midst of a debt repayment crisis that came to light after a media report on Friday last week alleged money laundering in one of its group companies.
Zee’s shares fell sharply and Chandra issued a dramatic open letter the same evening alleging negative forces were scuttling his efforts to find a buyer for his stake in Zee Entertainment Enterprises, Essel’s flagship company.
Following his letter on Friday, Chandra on Sunday said the group’s lenders have agreed to give it a three-month extension on debt repayments.