New Delhi: State-owned gas utility company GAIL (India) Ltd is considering acquiring all of the wind energy assets held by subsidiary of debt-laden Infrastructure Leasing and Financial Services (IL&FS), according to people familiar with the matter.

GAIL India is looking to buy 775 megawatts (MWs) of wind energy assets from IL&FS Energy Development Co., a unit of IL&FS, and has approached investment bankers to advise on a possible deal, the people said, asking not to be named as the talks are private. The discussions are at a preliminary stage and a decision to bid hasn’t been made, the people cited above said.

A deal will give India’s biggest gas utility is an opportunity to add to its existing renewable energy portfolio of 129 megawatts (MWs) and help offset emissions.

For IL&FS, the asset sales are key to revive the beleaguered shadow lender whose payment defaults have sparked fears of a contagion across the financial system in India.

People aware of the matter said GAIL would not consider buying the entire wind energy assets of IL&FS unless offered at a steep discount.

“GAIL is not aware that IL&FS is in the market to sell its wind energy assets. When they come to the market and to us, we will have a look at it," said one of the officials aware of the matter.

An IL&FS spokesman declined to comment, while GAIL’s spokeswoman didn’t immediately respond to emailed queries.

GAIL had 3,240 crore ($451 million) of cash, cash equivalents and short-term investments as of 31 March, according to data compiled by Bloomberg. The wind energy assets held by the IL&FS unit are about 2% of the country’s installed capacity in the segment.

IL&FS’s newly formed board said at the end of last month that resolution options could broadly involve significant capital infusion, asset sales and debt restructuring at group, business vertical or asset level.

The government last month took control of the troubled shadow bank, promising to end the group’s string of defaults.

Power play

The deal will help GAIL add 129MW to its renewable energy portfolio

GAIL had 3,240 cr of cash, cash equivalents and short-term investments as of 31 Mar

IL&FS’s wind energy assets are about 2% of India’s installed capacity in sector

The govt last month took control of IL&FS, promising to end the group’s defaults

Reuters contributed to this story.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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