The Shapoorji Pallonji group is seeking buyers for 300-350 megawatts (MW) of planned solar projects to deleverage balance sheet and solve liquidity issues, two people aware of the development said. Group companies had won these projects in auctions by the Solar Energy Corp. of India Ltd (SECI) and have tied up power purchase pacts, but are yet to start work on them.
The group had recently sold 317MW of operational solar projects in Maharashtra and Tamil Nadu to private equity investor KKR for ₹1,554 crore.
“They are in the market to sell these PPAs (power purchase agreements) which they won in SECI bids. These are contracts where project construction is yet to start or some minimal development has been undertaken. Given the group’s liquidity situation, they now do not want to invest equity in developing these projects," said the first of the two people cited above, both of whom requested anonymity as the talks are private.
Selling the agreements would imply divesting the company which has signed the solar contracts and the power purchase agreements.
According to the second person, Shapoorji Pallonji is already in talks with a few financial investors.
“Brookfield is one of the investors that has evinced interest in these PPAs as they are also exploring greenfield development of renewable projects. While Shapoorji wants to sell the ownership rights, they would like to retain the EPC contract to build these projects," said the second person.
Shapoorji Pallonji and Brookfield declined to comment on the development.
Shapoorji’s liquidity issues surfaced last year, when the group sought an extension in repayment of dues worth around ₹2,644 crore to Sterling and Wilson Solar Ltd, a group firm, blaming “significant and rapid deterioration in the credit markets following the fallout of defaults at IL&FS. The loan was to be repaid within 90 days of Sterling and Wilson Solar Ltd’s (SWSL) IPO, which ended mid-November 2019. The promoters have so far repaid ₹1,500 crore the company, with ₹500 crore due on 30 June and the rest by 30 September.