The flames of India’s burning private sector debt crisis has reached the solar power market as well, with a large project developer being forced to engage in a stressed sale of assets.
Indian business daily Mint has reported that troubled Indian company Essel Infraprojects is in talks with yet another company to sell its solar power projects to repay outstanding debt. The Adani Group is the latest company interested in acquisition of the 310 megawatt operational solar power portfolio of Essel Infraprojects. Essel has an additional 375 megawatts of capacity under various phases of development.
The operational projects owned by Essel are reportedly valued at around US$300 million. Proceeds from the sale of these projects shall be used to repay all outstanding debt that company owes to various investors.
The Adani Group is the latest among almost half a dozen companies which has been reported as the possible buyer of Essel’s solar power projects. About one year ago, Greenko Energy Holdings was in advanced discussions to acquire the complete portfolio of 685 megawatts of capacity. Greenko Energy Holdings had also acquired the solar portfolio of SunEdison India after the latter’s parent filed for bankruptcy. However, the deal for Essel’s solar power assets could not go through.
Private equity group Actis, too, had entered discussion with Essel to acquire the entire portfolio in an estimated deal worth over US$670 million. However, the said deal once again fell through. Other project developers that reportedly discussed acquisition of Essel’s solar assets include Tata Power Solar and Acme Solar Holdings.
The Essel Group has been forced to sell its solar power projects, among other assets, in order to repay outstanding interest payments on debt instruments that have already matured. Several mutual funds in India had purchased commercial papers issued by various subsidiaries of Essel Group.
Essel Group has an outstanding debt worth US$1.6 billion. Another business daily, Economic Times, reported that various mutual funds have invested more than US$1.15 billion in commercial papers issued by Essel Group. The company has asked asset management companies for time until the 30th of September to clear all dues, hence the frantic asset sale.