New Delhi: State-run GAIL (India) Ltd is in the process of accepting the Letter of Intent (LoI) and signing Share Purchase Agreement (SPA) with bankrupt Infrastructure Leasing and Financial Services' (IL&FS) for the acquisition of its 26 percent stake in ONGC Tripura Power Company Limited (OTPC), the PSU said in a regulatory filing to the stock exchanges on Tuesday. The statement comes just four days after the Competition Commission of India (CCI) approved the acquisition. GAIL had submitted a bid to acquire IL&FS's stake in OTPC on December 24, 2020.
While informing the bourses that the LoI for the acquisition has been received by GAIL, the PSU said that once the SPA is signed, IL&FS will send the proposal to National Company Law Tribunal (NCLT) for approval. "… application for CCI approval was submitted by GAIL on 09.08.2021. CCI granted its approval for the proposed transaction vide letter dated 09.09.2021. Parallely, M/s Arpwood (advisor of IL&FS) vide e-mail dated 31.08.2021 provided the Letter of Intent (LOI) to GAIL. After acceptance of LOI by GAIL and signing of SPA, IL&FS shall send the proposal to NCLT for approval," said the document.
"It may be noted that the transaction will be completed and IL&FS' shares in OTPC will be transferred to GAIL after NCLT approval," it added.
The acquisition assumes significance because it comes in the backdrop of the government's plan to push the share of natural gas in India's energy mix from 6 percent to 15 percent by 2030. The ONGC Tripura Power Company, known as OTPC, is a 726.6 MW Combined Cycle Gas Turbine (CCGT) thermal power plant at Palatana, Tripura. While ONGC, IL&FS and the Tripura state government hold 50 percent, 26 percent and 0.5 percent, respectively, in the project that supplies electricity to the northeastern states, India Infrastructure Fund II holds the balance 23.5 percent stake in the gas thermal power plant.
As part of its diversification plan, GAIL has declared its intention to acquire renewable energy assets from private firms. At a recent investors' conference, GAIL CMD Manoj Jain had said that the company is focussed on building a clean energy portfolio and is looking at both "big and small" private firms for acquisition of solar power assets.
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