MUMBAI: Tata Power, Torrent, JSW Energy, Greenko, Sterlite Power and Statcraft are among the 15-plus applicants who have submitted their expressions of interest (EoIs) for IL&FS group’s renewable energy assets worth Rs 8,000 crore — the second largest vertical after roads.
Bidders for the business, which has wind and solar power assets, include public sector entities and private equity funds as well. The bidders are expected to commence a due diligence process, which includes physical inspection. They will also review the power generation capacity, the power purchase agreements with governments, the tenure and longevity of the projects and the outstanding debt.
The bad news for lenders is that the sale process will take several months and is unlikely to be completed during the current fiscal. This means that banks will have to make provisions on their exposure to the group in their FY19 results. IL&FS spokesman Sharad Goel refused to comment on the transaction.
Lenders to IL&FS had sought a special dispensation from the Reserve Bank of India (RBI), seeking a waiver from making any provisions on their exposure to IL&FS. The representation was made on the grounds that the troubled infrastructure finance company was barred from making any payments by a court-imposed moratorium. The RBI has, however, not acceded to their request.
Meanwhile, IL&FS said that it received more than 30 EoIs for its domestic road vertical, including its EPC (engineering, procurement and construction) and O&M (operation and maintainance) businesses. The last date for bids under the road vertical was Wednesday.
Before the new government-appointed board took charge, IL&FS had put its wind assets on the block. The company had moved ahead on a proposal to merge Orient Green Power’s wind power business with IL&FS Wind Energy. However, this proposal fell through, resulting in the mandate for an outright sale.
The assets for which EoIs have been sought from investors include operating wind power-generating plants with aggregate capacity of 874MW, as well as under-construction wind power-generating plants with aggregate capacity of 104MW. There is also a separate business relating to project development and implementation of solar power-generating plants and projects under development of approximately 300MW capacity.
Additionally, the renewable energy division includes asset management services for the operating wind power-generating plants as well as the business division conducting project development and implementation of wind power-generating plants. The company said that the proposed stake sale may be carried out as a basket or individually or in any combination. The board has engaged Arpwood Capital and JM Financial to assist in the potential transaction.