According to reports, IDFC Private Equity-promoted Green Infra Ltd is close to acquiring the wind power generating assets of TVS Energy, which add up to 59.5 MW.
TVS Energy is a wholly-owned subsidiary of TVS Motor Company and was set up only three years ago.
At least three companies are in the fray to buy wind assets — Mytrah Energy, Orient Green Power and Green Infra. A senior source in TVS Energy gave Green Infra a “99 per cent” chance of clinching the deal.
TVS Motor’s Chairman and Managing Director Venu Srinivasan told Business Line that running wind farms was proving to be too capital intensive. “You have to keep borrowing all the time,” a senior official said.
TVS Energy’s wind assets have been on the block for quite some time. Its wind assets sale, when it happens, would be the latest element in a trend of consolidation that is evident in the wind power industry now.
While DLF has been selling its assets piecemeal every now and then, companies such as Lanco Infra, Ashok Leyland and KS Oils have announced their intentions to sell. VRL Logistics closed a deal a few months ago, selling 42 MW of assets to Amplus Infra.
As the economy is in a wobble, companies are under pressure from their bankers to raise money by disposing of their non-core businesses. Many companies put up wind power capacity to avail themselves of the ‘accelerated depreciation’ benefit that helped them save tax. With little interest to grow the capital-intensive wind power business, these companies are selling off.
Clearly, wind power assets are passing from the hands of companies for whom ‘wind’ is a non-core business activity, to the hands of ‘independent power producers’ whose very business is to generate power and sell it. JP Morgan-backed Leap Green, Mumbai-based Ushdev International, Bharat Light and Power, and Green Infra are among the companies that have announced plans to grow their wind businesses. Ushdev International, for instance, intends to raise its capacity from 90 MW to 350 MW this year, only through acquisitions. Even its existing capacity was acquired from Suzlon Energy. Leap Green and BLP have bought parts of DLF assets. Green Infra is among the earliest acquirers—in 2009, it bought a 100-MW wind farm from the British oil giant, BP, which then began the process of exiting wind business.