Orient Green Power, IL&FS to evaluate merging of wind biz

Orient Green Power Company board has approved the proposal of entering into exclusive discussions with IL&FS Wind Energy to evaluate a merger of wind energy generation businesses of both the firms.
"Orient Green Power Company Ltd(OGPL) today announced that the board of directors of the company has approved entering into exclusive discussions with IL&FS Wind Energy to evaluate a potential merger of the Wind energy generation businesses of both entities," IL&FS said in a statement.
According to the statement the resultant merged entity will have 1.2 GW of operating wind capacity, and will be by far the largest listed renewable energy company in India.

OGPL is in the process of demerging its Wind and Biomass entities into two separate Companies, viz: OGPL (Wind) and Bio-bijlee Green Power Limited (Biomass) respectively, it said.
Subsequent to the demerger, OGPL will have an operating wind capacity of 425 MW in FY'17 with an additional 43 MW under construction which will augment capacity of the combined entity in FY'18, it further said.
IL&FS Wind has an operating capacity of 775 MW in FY'17. It is also developing an additional 228 MW which the merged entity will be in a strong position to acquire.

Both companies have entered into a non-binding Agreement with an exclusivity period of 90 days. At this stage, the companies would like to clarify that any potential outcome is subject to due diligence, definitive documentation and approvals by regulators, creditors, shareholders and other third parties. Arpwood Capital is engaged as the transaction advisor, it said.

Commenting on the transaction MD of SVL Limited and Vice Chairman, OGPL T Shivaraman said in the statement,"We believe combining the resources and capabilities of both companies into a single organisation will provide significant benefits to all stakeholders. This collaboration will result in the creation of a wind power generation company with a truly pan-India presence, and with the benefit of scale."
Shivaraman further said,"The combined entity will benefit from an enhanced financial position, geographic diversity of wind projects and a variety of Power Purchase Agreements. It will also enjoy a strong pipeline of new projects. This transaction provides OGPL a platform to substantially grow its foot print. As the pioneering pure-play listed renewable energy company in India, this transaction will enable OGPL to set new industry benchmarks."

Group CIO of IL&FS Vibhav Kapoor, said"This transaction will be value accretive for both parties: the combined entity will emerge as a market leading renewable energy Company with a presence across all significant wind markets in the country.