IL&FS has invited bids for its stake of power unit in Tamil Nadu

IL&FS, a prominent infrastructure development and finance company, has initiated the process of selling its stake in IL&FS Tamil Nadu Power Company Limited (ITPCL), a significant asset within its portfolio. Expression of Interest (EOI) has been solicited from potential buyers, with a deadline set for December 18, 2023.

ITPCL, a subsidiary of IL&FS Energy Development Company (IEDCL) Limited, holds substantial importance within the IL&FS Group. The company aims to divest its entire shareholding in ITPCL, which comprises a 92.42% equity stake owned by IEDCL and IL&FS, alongside Fully Convertible Debentures (FCCDs) worth ₹240 Crore held by IEDCL.

As part of IL&FS's resolution framework, ITPCL has recently restructured its outstanding debt with the approval of its lenders. It is in the process of filing an application with the National Company Law Appellate Tribunal (NCLAT) to transition from the Amber category to the Green category company classification.

In September, ITPCL completed an interim distribution of ₹2,150 crore to senior secured creditors, significantly reducing its outstanding debt by over ₹1,900 crores.

Initially conceptualized to establish an integrated 3,180 MW thermal power plant, ITPCL currently operates a 1,200 MW thermal power plant consisting of two units of 600 MW each located in Cuddalore, Tamil Nadu (approximately 50 km from Pondicherry).

The company holds a long-term Power Purchase Agreement (PPA) for Unit 1 with Tamil Nadu Generation and Distribution Co. Ltd (TANGEDCO) for a period of 15 years.

Additionally, ITPCL possesses a license for coal block mining in Upau, South Kalimantan, Indonesia, spread over 5,908 hectares. It is also in the process of constructing a captive port adjacent to the ITPCL power plant.

This divestment process marks a strategic move by IL&FS as it restructures its assets and aims to exit from its stake in ITPCL, a pivotal entity within its portfolio.

News by Rahul Yelligetti