Debt-laden Infrastructure Leasing and Financial Services (IL&FS) has completed the sale of its 26% stake in ONGC Tripura Power Company (OTPC) to Gas Authority of India Limited (GAIL) for Rs 1,227 crore.
IL&FS has been selling off assets as a part of an ambitious plan to raise funds to repay debt. With this transaction, the troubled infrastructure group has resolved a debt of around Rs 3,656 crore, which was a part of its total debt of Rs 99,000 crore as of October 2018.
After the cash strapped-company defaulted on several of its obligations In October 2018, the government constituted a new board to streamline operations and reduce its staggering debt. As per the last update from the new board of the company, the group has resolved over Rs 52,000 crore debt as against its aim to resolve around Rs 61,000 crore in total.
IL&FS Group held its 26% stake in OTPC in through two subsidiaries – 12% by IL&FS Energy Development Company Ltd and 14% by IL&FS Financial Services Ltd.
The group has received an aggregate sum of Rs 319 crore for its 26% stake from GAIL in the two companies.
GAIL will now hold 26% stake in OTPC, while other shareholders include ONGC at 50%, Indian Infrastructure Fund II at 23.5% and the Government of Tripura at 0.5%.
OTPC’s total debt of Rs 3,000 crore will be serviced under the new shareholding. The transaction has already received all the requisite approval.
OTPC was set up as a special purpose vehicle by ONGC, Government of Tripura, IL&FS, to set up and operate 726.6 megawatts (MW) combined cycle gas turbine thermal power plant at Palatana in Tripura. The project has environmental approval to set up additional two units of 363 MW each.
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