Orient Green, IL&FS Wind mull wind power assets merger

Merger of the wind assets of Orient Green and IL&FS Wind Energy set to create a company with 1.2GW of operating assets


Both IL&FS Wind and Orient Green have entered into a non-binding agreement with an exclusivity period of 90 days.
Both IL&FS Wind and Orient Green have entered into a non-binding agreement with an exclusivity period of 90 days.

Mumbai: Renewable energy firm Orient Green Power Co. Ltd (OGPL) said on Thursday it was evaluating a merger of its wind power business with IL&FS Wind Energy.

The merger of the wind assets of the two firms will create a company with 1.2 gigawatts (GW) of operating assets, OGPL said in a statement to the stock exchanges.

OGPL is in the process of demerging its wind and biomass entities into two separate companies—OGPL and Bio-bijlee Green Power Ltd, respectively.

Subsequent to the demerger, OGPL will have an operating wind capacity of 425 megawatts (MW), with an additional 43MW under construction.

IL&FS Wind has an operating capacity of 775MW, the statement said.

IL&FS is also developing an additional 228MW, which the merged entity will be in a strong position to acquire, OGPL said.

Both companies have entered into a non-binding agreement with an exclusivity period of 90 days. Boutique investment banking firm Arpwood Capital has been engaged as sole advisor to the transaction.

“We believe combining the resources and capabilities of both companies into a single organization will provide significant benefits to all stakeholders. This collaboration will result in the creation of a wind power generation company with a truly pan-India presence, and with the benefit of scale. The combined entity will benefit from an enhanced financial position, geographic diversity of wind projects and a variety of power purchase agreements,” said T. Shivaraman, vice chairman of OGPL.

OGPL will also enjoy a strong pipeline of new projects, he added.

“This transaction will be value-accretive for both parties. The combined entity will emerge as a market leading renewable energy company with a presence across all significant wind markets in the country,” said Vibhav Kapoor, group chief investment officer of IL&FS.

Shares of OGPL closed the day at Rs11.22, up by 11.53% on the BSE, while the benchmark Sensex closed at 27,308.60, up by 0.19%.

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