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Orient Green Power to discuss potential merger with IL&FS Wind Energy

If the merger takes place, entity will have 1.2 Giga Watt of operating wind capacity to become among the biggest listed renewable energy companies in India.

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Decks have been cleared for a merger, with Orient Green Power Company Limited’s (OGPL) Board of board of directors giving a nod for entering into discussions with IL&FS Wind Energy.

The discussions will evaluate a potential merger of the wind energy generation businesses of both the companies. If the discussions are successful, the merged entity will have 1.2 Giga Watt (GW) of operating wind capacity to become among the biggest listed renewable energy companies in India.

“OGPL is in the process of demerging its wind and biomass entities into two separate companies, that is, OGPL (wind) and Bio-Bijlee Green Power Limited (for biomass), respectively. 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,” read a statement by IL&FS.

IL&FS Wind has an operating capacity of 775 MW in FY 17. Additionally, IL&FS is also developing an additional 228 MW which the merged entity will be in a strong position to acquire.

“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,” said Vibhav Kapoor, Group CIO of IL&FS.

Both the companies have entered into a non–binding agreement with an exclusivity period of 90 days. Arpwood Capital has been engaged as the transaction advisor for the merger discussions.

“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. 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,” commented T Shivaraman, Vice Chairman, OGPL.

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