DLF Monday said that it has sought shareholders’ approval for sale of its wind energy unit. The company’s board has approved the sale of its entire wind power unit in its meeting on May 30 and has sought its shareholders’ approval for the purpose through a postal ballot, it said in a BSE filing.
Sources in the industry have said that this could be a pre-cursor to its eventual sale and there are indications that the deal value could be Rs10 billion.
The company has PPAs with Gujarat Urja Vikas Nigam Limited (GUVNL) and Hubli Electricity Supply Company (HESCOM) to sell power.
The two wind farms for sale are of 150 MW and 11.2 MW capacity and located at Kutch (Gujarat) and Gadag (Karnataka) respectively.
In a research note,Edelweiss has said that it values DLF’s wind power assets at Rs. 7.8 billion (8X EV to FY14E EBITDA of INR911mn).
Earlier this year there were indications that the four likely suitors for the wind assets included Green Infra Ltd, a company promoted by IDFC Private Equity Co. Ltd; Sumant Sinha’s ReNew Power Ventures Pvt. Ltd, Swraj Paul’s Caparo Group; and Orient Green Power Co. Ltd.
However this is not the first time that DLF has come close to finalizing the sale of its wind assets.
As early as May 2010, we had noted that, DLF had created a separate subsidiary called DLF Wind Power for its wind energy business as a precursor to sell its wind assets and had been placed in the market some time in March-April 2010.
At that time, the company was being advised by Ernst & Young in this regards and the initial names doing the rounds included BG Group Plc, Hong Kong-based CLP Group , India’s Adani Group, Essar Power and Infrastructure Leasing & Financial Services Ltd.
The size of installed capacity at that time was expected to be around 260MW making DLF Wind Power one of the largest IPP wind developers in India. The expected valuation was close to 1100 crore. The due diligence was carried out by Paris-based Gaz de France, a major energy player in Europe and renewable energy group Akuo Energy. However it was rumored that the deal fell through on accounts of valuation.