PROJECT | Staff Reporter, Japan

Japan's ORIX to buy out IL&FS wind assets

It is looking to buy the remaining 51% stake it does not already own.

Japan’s financial services firm ORIX Corporation, which owns a 49% stake in the seven operating wind power plants (SPVs) of debt-laden Indian infrastructure and finance company Infrastructure Leasing & Financial Services (IL&FS), has expressed its intent to buy out the remaining 51% stake held by IL&FS Wind Energy (IWEL), an announcement revealed.

This intent to buy 51% stake is in exercise of ORIX’s right under the terms of an existing memorandum of understanding (MoU) wherein ORIX can match the price offered by the highest bidder for purchasing IWEL’s stake in the wind SPVs.

“This development represents completion of a key step in the resolution process for IL&FS group being undertaken by the new board of IL&FS,” IL&FS revealed. Earlier, at the end of the binding bid stage under a publicly conducted sale process, India’s largest state-owned natural gas processing and distribution company GAIL emerged as the highest bidder for the seven SPVs, which have a total generation capacity of 874MW.

GAIL’s offer of approximately $690.1m (IND48b) for 100% of enterprise value contemplated no haircut to the debt of the SPVs, aggregating to approximately $530m (IND37b), IL&FS noted.

Closure of the sale process is expected by end-June 2019, subject to legal approvals.

As part of an overall resolution, IL&FS also revealed that its new board has initiated a number of asset sales to address a significant portion of group debt. Sale process for assets in the areas of education, funds, domestic roads, thermal power, water infrastructure, technology and key international assets is currently underway, and binding financial bids are expected for these companies and businesses in stages by July 2019. 

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