State-run GAIL (India) Ltd has emerged as the highest bidder to buy seven operating wind energy assets of the financially struggling Infrastructure Leasing & Financial Services Ltd (IL&FS).
The gas distributor offered about Rs 4,800 crore ($689 million) for the assets, IL&FS said in a statement. This means lenders to the special purpose vehicles that operate the wind energy assets will not have to take any haircut on their debt of about Rs 3,700 crore.
The Committee of Creditors of IL&FS Wind Energy Ltd, the majority owner of the SPVs, approved GAIL’s offer unanimously. The lenders are in talks with Japan’s ORIX Corp, the other shareholder in the SPVs, with regards to the proposal. The deal is likely to close in three weeks’ time subject to mandatory approvals, IL&FS said.
The infrastructure financier and developer is selling assets as part of a restructuring after the company and its units started defaulting on their debts last year. The defaults triggered concerns about risk in the country’s financial system and led to the Indian government taking control of IL&FS in October. IL&FS and units owed Rs 99,354 crore at the end of September 2018.
The process to sell the wind energy assets was launched in November 2018. According to media reports, IL&FS had received 22 expressions of interest including from private equity investors such as KKR, Brookfield, I Squared Capital and Macquarie to buy renewable energy assets with total capacity of more than 1,000 megawatts.
After examining binding bids, GAIL emerged as the highest bidder for seven operating wind power plants with a total generation capacity of 874 MW.
IL&FS also said that sale processes for education, PE business, roads and thermal power plants are underway and that it expects to receive binding financial bids for these companies in stages by May.
The IL&FS board has hired Arpwood Capital and JM Financial as the financial and transaction advisers, and Alvarez & Marsal as the bankruptcy resolution consultant.