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IL&FS’s energy advisory business lands up on chopping block
Photo Credit: Reuters

Debt-laden Infrastructure Leasing & Financial Services Ltd has put the energy advisory business of IL&FS Energy Development Company Ltd (IEDCL) on the block. 

As part of its debt-reduction plan, the crisis-hit infrastructure lending major has invited Expressions of Interest (EoI) for the business, along with all its assets and liabilities, on a slump sale basis.

It has already received a binding offer which will be subject to a bidding process akin to the 'Swiss Challenge Method', IL&FS said in an advertisement seeking EoIs, which have been asked to be submitted by 5 pm, December 7.

IL&FS started the energy advisory business in 2008 with an objective to develop, own and operate power generation and transmission assets in India and abroad.

IL&FS and IL&FS group collectively hold 95.54% of the total issued and paid-up equity share capital of IEDCL.

IL&FS said that the advisory business of IEDCL has extensive experience in development of generation (conventional and non-conventional), transmission and distribution projects for both third-party clients and in-house projects.

Current mandates of the advisory business are the demand-side management (DSM) projects of Energy Efficiency Services Ltd (EESL) and other advisory assignments. The EESL projects are the biggest revenue driver whereas the other projects are much smaller.

The business has a total of eight ongoing EESL Projects worth Rs 91.6 crore projected to be completed by December-end and additional LEDs installed, and some in pipeline ranging from Rs 7.7-18.5 crore, it said in a presentation report.

Last week, IL&FS Financial Services put up for sale around 70 corporate loan accounts, which have turned into non-performing assets (NPAs), aggregating to a total outstanding principal of Rs 4,785 crore ($645 million).  

The IL&FS group’s overall debt-reduction plan started in October 2018.

Last month, the crisis-hit group had said the aggregate value of debt being addressed is pegged at Rs 56,300 crore – with over Rs 50,000 crore ($6.75 billion) likely to be addressed by March 2021.

In the July-September quarter, the group was able to address debt of just around Rs 1,460 crore as against an earlier estimate of around Rs 8,800 crore during the period. The group said the Rs 7,300 crore shortfall has been rolled over for resolution in subsequent quarters.

In April, IL&FS sold its stake in IL&FS Wind Power Services Ltd to Japan’s Orix for Rs 6.06 crore. Earlier this year, the IL&FS board was planning a sale of its real estate assets worth Rs 3,500 crore and also its stakes in Gujarat International Finance Tec-City (Gift City) valued at approximately Rs 1,200 crore.

In November last year, IL&FS got approval from its lenders to sell its majority holding in Schoolnet India Ltd (formerly known as IL&FS Education & Technology Service Ltd) to Career Point Publications Pvt. Ltd.

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