Essel Group To Sell 205 MW Solar Assets To Adani Green Energy
The debt-ridden group’s standstill with lenders expires in a little more than a month.
Subhash Chandra-led Essel Group agreed to sell some of its operating solar assets to billionaire Gautam Adani’s conglomerate as the Zee Group promoters continue to sell assets to repay lenders.
Essel Infraprojects Ltd. and Essel Green Energy Pvt. Ltd. sold 205-megawatt solar farms to Adani Green Energy Ltd. at an enterprise value of Rs 1,300 crore, according to separate statements. The transaction for the sale of units located in Punjab, Karnataka and Uttar Pradesh is expected to be completed by Oct. 15.
As part of the agreement, Adani Green will acquire 100 percent stake in 10 companies of the Essel Group, according to its exchange filing. The total debt of these companies at the end of March 2018 was Rs 1,255.28 crore, according to BloombergQuint’s calculation from documents accessed via the Registrar of Companies. Documents for the previous financial year were not available at the RoC.
BloombergQuint sent an email to Essel Group asking for a total debt of these companies as of March 2019. The copy will be updated as they respond.
The Essel Group, in its statement, said it’s working towards closing the sale of additional 480 MW solar assets. It has already announced sale of 11 percent stake in Zee Entertainment Enterprises Ltd. to Invesco Oppenheimer Developing Markets Fund at Rs 4,224 crore.
The debt-ridden group’s standstill with lenders expires in a little more than a month. Lenders had given time till September-end after the Zee Entertainment Enterprises stock, offered as collateral against loans, tumbled 37 percent in a single day on Jan. 25 on worries around promoter debt, raising its default risk.
“Our asset divestment process is well within the purview of the agreed timelines with our esteemed lenders. The sale of the group’s solar assets to AGEL is yet another positive step taken in this direction,” the company said in the statement press release. “All the assets have long-term power purchase agreements with various state electricity distribution companies.”
After the acquisition, Adani Green’s portfolio of renewable generation capacity in India will stand at 5.50 gigawatts with 2.43 GW operational projects and balance 3.07 GW in development stage, the company said in its exchange filing.
The deal will deliver value to shareholders, Jayant Parimal, chief executive officer of Adani Green Energy, said. “This is our first brownfield acquisition of operating assets. It expands our footprint in states where we already have a presence.”
Macquarie Research expects around Rs 400 crore proceeds from the deal to be used for repaying the balance loan amount after Sept. 19 of Rs 2,000-3,000 crore, the brokerage said in a note. “We expect Zee to trade below fair value until repayment of the outstanding loan by Sept. 30,” it said.