Infrastructure Leasing & Financial Services Ltd (IL&FS) has received approval from a court-appointed judge to sell its wind energy business to Japan’s Orix Corp.
Justice (retd) DK Jain, appointed by the National Company Law Appellate Tribunal (NCLAT) to supervise the operation of the debt resolution process of IL&FS group companies, has approved the sale of IL&FS Wind Energy Ltd.
The approval was granted after Orix deposited the bid amount in an escrow account. The amount will be disbursed in accordance with the directions in the NCLAT proceedings, IL&FS said in a statement.
The proposal will now be placed before the National Company Law Tribunal for its approval.
Orix already owns a 49% stake in each of seven operating wind power units of IL&FS. The Japanese company had shown interest to buy the remaining stake in May.
Orix had matched an offer made by state-run gas distributor GAIL (India) Ltd in April. GAIL had emerged as the highest bidder by offering Rs 4,800 crore for IL&FS’s wind energy portfolio. The offer means lenders to the projects won’t have to take any haircut on their debt of Rs 3,700 crore.
The board of IL&FS had approved the sale of the seven units to Orix on June 28. The seven companies are Lalpur Wind Energy Pvt. Ltd, Etesian Urja Ltd, Khandke Wind Energy Pvt. Ltd, Retadi Wind Power Ltd, Wind Urja India Pvt. Ltd, Tadas Wind Energy Pvt. Ltd and Kaze Energy Ltd.
IL&FS has been struggling since last year after it defaulted on its debt. The defaults prompted the government to replace its entire board. IL&FS is now selling its assets to pay off its debt.