Court approves sale of IL&FS Wind Energy shares to ORIX, free from encumbrances.

The court approved the sale of shares held by IL&FS Wind Energy Ltd. in the Specified Wind SPVs to ORIX, directing the transfer of shares free from encumbrances upon ORIX's payment. The resolution process followed NCLAT orders and Justice (Retd.) D.K. Jain's directions, with the Tribunal granting approval for the sale and instructing the parties to adhere to the SPA terms, including depositing payments in an escrow account.

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Issues Involved:
1. Approval of the sale of shares of Specified Wind SPVs held by IWEL to ORIX.
2. Compliance with the terms of the SPA.
3. Resolution process for IL&FS Group's subsidiaries.
4. Execution of shareholders agreements and MOUs.
5. Public solicitation and bidding process.
6. Valuation and financial bids.
7. Approval from creditors and judicial authorities.
8. Implementation and consummation of the sale.

Issue-wise Detailed Analysis:

1. Approval of the sale of shares of Specified Wind SPVs held by IWEL to ORIX:
The application MA 2756/2019 was filed by Infrastructure Leasing and Financial Services Ltd. (IL&FS) seeking approval for the sale of shares of Specified Wind SPVs held by IWEL to ORIX, free from all encumbrances, upon receipt of the ORIX Revised Bid amount. This sale is part of the resolution process for seven subsidiaries of IL&FS, including Lalpur Wind Energy Pvt Ltd., Etesian Urja Ltd, Khandke Wind Energy Pvt Ltd, Ratedi Wind Power Pvt Ltd, Wind Urja India Pvt Ltd, Tadas Wind Energy Pvt Ltd, and Kaze Energy Ltd.

2. Compliance with the terms of the SPA:
The sale was to be conducted in compliance with the terms of the Share Purchase Agreement (SPA) dated 7.8.2019 entered into between IWEL and ORIX. The SPA outlined the procedural requirements and financial terms for the sale of shares.

3. Resolution process for IL&FS Group's subsidiaries:
The resolution process was guided by the initial resolution framework and its addendum, which aimed to achieve asset-level resolution through public solicitation and price discovery mechanisms. The process included inviting Expressions of Interest (EoI), conducting due diligence, and soliciting binding financial bids.

4. Execution of shareholders agreements and MOUs:
Shareholders agreements (SHAs) were executed in March 2016 and March 2018, governing the inter-se rights and obligations between shareholders. Additionally, MOUs were executed to explore exit strategies and modify the monetization process from a private bilateral process to a public one.

5. Public solicitation and bidding process:
A public advertisement for EoIs was issued, and eligible applicants were provided access to an Information Memorandum and a data room. The process aimed to maximize asset value and ensure transparency. GAIL (India) Limited emerged as the highest bidder with a bid of approximately INR 4,800 crores, assuming all debt and attributing a positive equity value to the shares.

6. Valuation and financial bids:
Two registered valuers, Rakesh Narula & Co. and Adroit Technical Services, were appointed to determine the fair market value (FMV) and liquidation value (LV) of each Specified Wind SPV. GAIL's bid matched the highest financial bid amount, categorizing the Specified Wind SPVs as Category I companies.

7. Approval from creditors and judicial authorities:
The Creditors' Committee of IWEL unanimously approved GAIL's bid, and the bid was disclosed to ORIX. ORIX exercised its right to match GAIL's bid and confirmed its intention to acquire the shares. The sale process was approved by Justice (Retd.) D.K. Jain, subject to conditions, and the proposal was placed before the National Company Law Tribunal (NCLT) for final approval.

8. Implementation and consummation of the sale:
The Tribunal approved the sale of shares held by IL&FS Wind Energy Ltd. in the Specified Wind SPVs to ORIX, directing the transfer of shares free from all encumbrances upon ORIX making the required payments as per the SPA. The Tribunal also granted liberty to IWEL and ORIX to implement the SPA terms and directed that the payments be credited into a designated escrow account, to be maintained as an interest-bearing fixed deposit, subject to further orders of the Tribunal.

Conclusion:
MA 2756/2019 was allowed, approving the sale of shares held by IL&FS Wind Energy Ltd. in the Specified Wind SPVs to ORIX, and directing the transfer of such shares free from all encumbrances upon ORIX making the required payments. The resolution process was conducted in compliance with the orders of the Hon'ble NCLAT and the directions of Justice (Retd.) D.K. Jain.

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