IL&FS in talks with Orient to merge wind energy assets

IL&FS in talks with Orient to merge wind energy assets

Infrastructure Leasing and Financial Services (IL&FS) is in advanced talks to merge its wind energy assets with Chennai-based listed Orient Green Power

The all-stock reverse merger of unlisted IL&FS Energy Development will value the combined entity at Rs 4,500-5,000 crore, said two people with knowledge of the matter. At 1,400 MW generating capacity, it will create one of India’s largest listed wind energy companies.

“The boards of IL&FS and Orient are expected to meet soon and discuss a merger proposal which, if cleared, will help the entity to acquire more wind energy assets,” said one of the persons quoted earlier. “The plan is to consolidate and use stock and cash to acquire assets that will help scale up capacity to over 2,000 MW by financial year 2018.”

IL&FS, India’s leading infrastructure financier, will be the largest shareholder with more than 50 per cent stake, followed by Shriram Ventures and Orix Corporation of Japan.

Private equity funds Bessemer Ventures and Olympus Capital — investors in the Shriram Ventures-proown minority stake. The merged entity will have Rs 1,200-crore operating profit on revenue of Rs 1,400 crore. Valued at seven times the operating profit, it will have a debt of Rs 3,500 crore. Read More…

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