First Bids Under IL&FS Asset Monetisation Expected Soon

The sale of its renewable energy business will reduce the total debt of IL&FS by Rs 5,000 crore.

Cash-strapped IL&FS Group will receive first set of bids under the asset monetisation process on Monday as part of the resolution process, according to sources. The company’s board will later consider bids for Rs 8,000 crore renewable energy business that was put on the block in November 2018, the sources said.

This will be the first set of bids that will be opened under the asset monetisation process as part of the resolution process by government-appointed and Uday Kotak-led new board, they added.

The group, which is sitting on the debt of about Rs 94,000 crore debt, had decided to sell assets in various verticals, including roads, education, renewable energy, and broking in November last year.

The renewable assets of the group include operating wind power plants with an aggregate capacity of 873.5 MW and under-construction such plants with 104 MW capacity. It also includes the solar power business, under which it has around 300-MW of under-construction projects. Japan’s Orix is the joint venture partner in the wind power business and the completion of the sale of this business is expected to reduce IL&FS debt of about Rs 5,000 crore.

According to sources, nearly two dozen firms had participated in the expression of interest sought by the company that ended on December 10, 2018.

However, the completion of the entire process and shortlisting of the final bidder will take a few weeks as multiple processes are involved. LIC is the single largest shareholder with over 25 percent stake in IL&FS and Orix Corp owns a little over 23 percent.

IL&FS Employees Welfare Trust holds 12 percent in the company. The Abu Dhabi Investment Authority, HDFC and Central Bank of India hold 12.56 percent, 9.02 percent, and 7.67 percent, respectively, in the cash-strapped company. The country’s largest lender SBI has around 7 percent stake in the company.

In November 2018, we reported that the debt-laden Infrastructure Leasing & Financial Services provider has decided to monetise its renewable energy assets worth Rs 8,000 crore and that it had initiated the process to sell its controlling stake in the green energy business as a part of its resolution process.