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IL&FS sells two energy arms for Rs 77.5 crore, proceeds will be used to pare debt 

July 28, 2022 / 12:42 PM IST
Representative Image (Reuters)

Representative Image (Reuters)

The Infrastructure Leasing & Financial Services Ltd (IL&FS) group has completed the sale of its stake in two energy assets—Urjankur Shree Tatyasaheb Kore Warana Power Company Limited (Urjankur Warana) and IL&FS Energy Development Company Limited (IEDCL)—for a total of Rs 77.5 crore, it said in a statement on Thursday, July 28.

“Proceeds from both these sale transactions would be used by the new IL&FS board towards reducing overall debt as per the resolution framework approved by NCLAT (National Company Law Appellate Tribunal),” the company said in the statement.

IL&FS completed the sale of its 33.33 percent stake in Urjankur Warana to Shree Tatyasaheb Kore Warana Sahakari Sakhar Karkhana Ltd (HSF – Host Sugar Factory). Urjankur Warana is a special purpose vehicle (SPV) jointly promoted by IEDCL, which holds a 33.33 percent stake, and Urjankur Nidhi  Fund, which holds the balance 66.67 percent.

IEDCL also owns 27.75 percent of Urjankur Nidhi Trust along with Maharashtra Energy Development Agency that holds 50 percent, with Shree Datta Shetkari Sakhar Karkhana Ltd holding the remaining 22.25 per cent stake in the trust.

“With this transaction, IL&FS group has sold its 33.33 percent stake in Urjankur Warana and its 27.75 percent stake in Urjankur Nidhi Trust to HSF at an aggregate consideration of Rs 62.5 crore. IL&FS has now exited both these entities completely,” the company said.

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The second transaction entails the sale of IL&FS’ energy advisory business, which was a division of IEDCL, to PTC India Limited. PTC emerged as the highest bidder for the asset in July at a consideration of around Rs 15 crore. The entire advisory business undertaking with its contracts and projects team, which includes 300 personnel, will now move to PTC India.

IEDCL entered into a share purchase agreement with HSF for sale of its entire holding in Urjankur Warana at a consideration of Rs 62.5 crore and received necessary approvals for the deal in December 2020. Urjankur Warana owns a 44 MW bagasse-based cogeneration power plant in Maharasthra’s Kolhapur district.

With these transactions, IL&FS Group’s headcount stands at around 4,000 employees, down 80 percent from 2018.

In an update in March, the new IL&FS board said that it had addressed Rs 55,000 crore of debt, comprising Rs 21,000 crore from monetisation of assets, Rs 20,000 crore from its infrastructure investment trust and cash balances and Rs  14,000 crore of claims filed with courts. The board had maintained its aggregate resolution estimate at Rs 61,000 crore.
Moneycontrol News
first published: Jul 28, 2022 12:42 pm
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