IL&FS Group sells stake in ONGC Tripura to GAIL for Rs 319 cr – World Affairs SRS

IL&FS Group sells stake in ONGC Tripura to GAIL for Rs 319 cr

– World Affairs SRS

IL&FS Group has sold its 26 per cent stake in ONGC Tripura Power Company (OTPC) to GAIL (India) for Rs 319 crore. According to officials with knowledge of the matter, the amount will be credited to the cash balance of IL&FS and disbursed as per the resolution plan approved by the National Company Law Appellate Tribunal (NCLAT).

IL&FS’s 26 per cent stake in OTPC was valued at Rs 1,227 crore for this transaction. According to a statement by IL&FS, approximately Rs 3,656 crore of debt, which is estimated to be part of the group’s total debt of around Rs 99,000 crore (as of October 2018), has been resolved through this transaction.

IL&FS Group holds 26 per cent stake in OTPC through two subsidiaries. IL&FS Energy Development Company (IEDCL) held 12 per cent and IL&FS Financial Services (IFIN) held the rest. As per initial shareholding, Oil and Natural Gas Corporation (ONGC) had 50 per cent stake in OTPC, India Infrastructure Fund II held 23.5 per cent and Tripura government 0.5 per cent. Post this transaction, GAIL will hold 26 per cent stake in OTPC, with ONGC, Indian Infrastructure Fund II and Tripura government holding their respective shares.

OTPC is classified as a green company, and has a total debt of about Rs 3,000 crore, which will continue to be serviced under the new shareholding, the IL&FS statement said, adding that the group has been given creditors’ credit. Approval was received from the committee, retired Supreme Court judge DK Jain, National Company Law Tribunal (NCLT) and Competition Commission of India (CCI) for stake sale.

OTPC is a special purpose vehicle designed by ONGC, Government of Tripura and IL&FS for installation and operation of 726.6 MW Combined Cycle Gas Turbine (CCGT) Thermal Power Plant at Paltana, Tripura. The company has received environmental clearance for setting up two more units of 363 MW each, taking the total capacity to 1,453 MW.

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