Infrastructure Leasing & Financial Services Ltd (IL&FS) has received an insolvency court’s approval to sell its 50% stake in Gujarat International Finance Tec-City Company Ltd to the government of Gujarat, its joint venture partner.
The state government has agreed to pay Rs 32.7 crore for the stake, IL&FS said in a statement.
Gujarat International was set up as an equal joint venture between the state government, via Gujarat Urban Development Company Ltd, and IL&FS to develop an integrated township and financial services hub.
While approving the sale, the National Company Law Tribunal (NCLT) said that the price is higher than the fair market value of the stake. The tribunal also cleared the Gujarat government from all tax and third-party claims.
IL&FS had received a proposal from the state government to buy its stake in GIFT city earlier this year. At the time, it had said that the enterprise value of its stake was around Rs 1,200 crore. The enterprise value included a company’s debt.
The deal is part of IL&FS’ asset sales after the infrastructure financier and operator defaulted on its debts and collapsed in late 2018, prompting the government to install a new board led by banker Uday Kotak.
The troubled group is in the midst of resolving its debt of over Rs 99,000 crore ($13.8 billion) and has been trying to sell several assets.
IL&FS has put up on sale many of its operational assets in energy, transportation, waste management, technology, water and urban infrastructure verticals.
Earlier this week, it invited potential buyers for its 26% stake in gas-based power plant ONGC Tripura Power Co. Ltd.
In July last year, its approved the sale of IL&FS Wind Energy Ltd to Japanese partner Orix Corp, which already owned a 49% stake in each of seven operating wind power units of IL&FS.
In November, the firm 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. (CPPPL).