AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (9) TMI 27
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....f the applicant company, and Respondent No.10 is currently the Chief Financial Officer of the applicant company. The present application has been filed in accordance with the third progress report on the proposed resolution framework with ILFS Group dated 17.12.2018 (initial resolution framework) and the addendum to the initial resolution framework dated 15.1.2019, seeking approval from this Tribunal to conclude the resolution process for the following seven subsidiaries (subsidiaries of IL&FS); i.e. 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. It is further stated that the Specified Wind SPV are the subsidiaries of IL&FS Wind Energy Ltd (IWEL) which holds 51% shareholding in each of the said seven entities. IWEL is a wholly-owned subsidiary of IL&FS Energy Development Co Ltd (IEDCL) which in turn is a subsidiary of the Applicant (91.42% shareholding of the applicant). The balance 49% in each of the Specified SPV's are held by ORIX Corporation (ORIX), a company incorporated under the Laws of Japan. It is further stated ORIX purchased 49% sharehold....
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....Terms"). ** ** ** It is further stated that before the New Board was appointed by this Tribunal, ORIX, IWEL, IEDCL executed a Memorandum of Understanding dated 30.3.2018 (First MOU) in respect of the Specified Wind SPVs under which the parties thereto agreed to explore/consider exit strategies from the Specified Wind SPVs and superseded any contrary terms in the SHAs. The relevant clause of MOU is given below below: "i. ORIX, IWEL and IEDCL (Parties) will jointly consider the exit strategies for their: (a) existing investments in the Exis....
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....MoU and SHAs to a public one. Accordingly, a memorandum of undertaking dated 28.11.2018 (second MOU) was executed by and between ORIX, IEDCL and IWEL in terms of which it was agreed that the process of monetizing the applicant group and ORIX's investments in the Specified Wind SPVs would be modified (from the private bilateral process contemplated in the SHAs read with the First MoU) as follows: i. The Applicant will issue a public advertisement for soliciting Expressions of Interests (EoI) for purchase of its interests in the Specified Wind SPVs. "The parties will proceed to monetize the investments made in each of (i) Wind Urja India Private Limited. (ii) Ratedi Wind Power Private Limited. (iii) Tadas Wind Energy Pvt Ltd. (iv) Lalpur Wind Energy Pvt Ltd. (v) Khandke Wind Energy Pvt Ltd. (vi) Etesian Urja Ltd. and (vii) and Kaze Energy Limited (Collectively referred to "Wind SPVs") in terms of the following process: (a) Infrastructure Leasing and Financial Services Ltd will issue a public Advertisement for soliciting Expressions of Interest for purchase of its interests in the Wind SPVs. Teaser will capture information on the business; (b) Parties who qualify in....
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....Resolution Framework and the addendum Framework to the petitioner (collectively referred to as the "Resolution Framework", which was filed by the Petitioner before this Tribunal (vide affidavit dated 15.1.2019). The Resolution Framework sets forth that given the position of and challenges in the applicant Group, as set out in the initial Resolution Framework, an "Asset level Resolution"(as defined in the first Progress Report and the Initial Resolution Framework) and in some cases, the sale of a business vertical comprising of a basket of companies and other entities is the most feasible option for resolution of the applicant group. The initial Resolution Framework and the Addendum Framework Resolution contemplate a step by step approach to achieve and "Asset Level Resolution" resolution of the Applicant Group. Summarily, these steps include: (a) Inviting EoIs on the basis of suitable eligibility criteria as may be applicable for the investors of a particular business/class of companies of the Applicant Group with regard to the nature of businesses for which such EoI are being invited; (b) Following the receipt of EOIs from potential investors, a request for proposal (an RFP)....
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....ame to be placed before Mr Justice D. K. Jain (Retd) appointed by the Hon'ble NCLAT vide order dated 4.2.2019 and 11.2.2019 to supervise the resolution process. (g) After the approval of Justice D.K. Jain (Retd) is received, an application to be filed before this Tribunal to consummate the transaction/resolution framework. The applicant has further stated that the resolution process for Specified Wind SPVs is given below: Sr No. Step as per Resolution Framework Date Details 1. A request for proposal ("RFP") will be issued to the eligible applicants (who meet the criteria set out in the EOI) February 3, 2019 (a) EOIs were received form 26 parties. (b) Twenty-two applicants qualified as per the eligibility criteria. (c) RFP circulated to the Eligible Applicants. 2. Eligible Applicants to be provided with: (i) Access to an information memorandum and a data room (populated by IWEL and the Specified Wind SPVs) containing material information relating to the Specified Wind SPVs and the eligible applicants will undertake a time-bound, legal and financial due diligence exercise; and (ii) Draft (s) of the transaction docume....
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....which is approx.. INR 3700 Crores), each of the Specified wind SPVs were categorized as Category I companies ( as contemplated under the Resolution Framework Reports). GAIL's bid of approximately INR 4,800 crores for 100% of Enterprise Value contemplated; (i) approximately INR 1064 crores as purchase price for 100% shares of the SPVs; and (ii) approximately INR 3,700 crores towards the aggregate debt of the SPVs, without any hair, cut. Therefore, as per Gail's bid, the value of IWEL's 51% would be INR 542.64 crores (approx). GAIL's bid was placed before the IWEL Board for its consideration and was identified as the Highest Bid. Further, IWEL Board authorised the formation of a "Creditors Committee of IWEL" and submission of the Gail Bid to IWEL's Creditors Committee. Since GAIL's bid attributed a positive equity value for the shares of each of the Specified Wind SPVs without proposing any haircut to the debt of any of the Specified Wind SPVs, each of the Specified wind SPVs are Category I Companies ( as contemplated under the Resolution Framework Reports). Accordingly, as per the Resolution Framework, a Creditors' committee was constituted comprising o....
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....ed Wind SPVs by paying the ORIX Revised Bid to IWEL. On July 1,2019 the Applicant issued a letter to Justice (Retd.) D.K. Jain for seeking approval of the sale of 51% (fifty-one per cent) shareholding in each Specified Winds SPV held by IWEL to ORIX and the Resolution of the Specified Winds SPVs. After that, by a letter dated July 15, 2019 Justice (Retd.) D.K. Jain approved sale of the Specified Wind SPVs to ORIX (subject to conditions prescribed therein). The operative part of Justice (Retd.) D.K. Jain's letter dated July 15, 2019 is as follows: " Having regard to the above factual scenario, and bearing in mind the object and spirit behind the Order dated February 11,2019, passed by the Hon'ble Company Law Appellate Tribunal in Company Appeal (AT) No. 346 of 2018, viz. maximization of the value of the assets of IL &FS, I grant approval to the subject proposal in respect of the Specified Wind SPVs, on the terms approved by the Board of Directors of IL & FS, subject, however , to the following conditions; (a) The proposal shall be placed before the Hon'ble National Company Law Tribunal for its approval for the consummation of the transaction by signing the Share P....
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....d attributed a positive equity value to the specified wind SPVs, a resolution of the Specified Wind SPVs would be a step towards the resolution of the aggregate outstanding debt of the Applicant Group. While the sale process of the Specified Wind SPVs is at its penultimate lap, whereas the asset sale process for education, funds, domestic road, thermal power, water infrastructure, technology and key international assets is underway. The asset sale process for the Specified Wind SPVs is the First asset sale process which has been placed for this Tribunal's approval as per the Resolution Framework. It is essential that this Tribunal grants approval/judicial sanction to the assets sale process for the 7 specified Wind SPVs since it would: a. give certainty to the applicants/ bidders engaged in other on going IL& FS Group asset sale processes that upon approval/acceptance of their binding offers, they will acquire title to the shareholding of the Sale Company and its assets ( free from encumbrances); b. Boost investor confidence: and c. Be an important milestone in the final resolution (s) of the IL & FS Group as a whole. The Resolution Framework is based on the principles ....
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....forth: i. a revision of its offer for the purchase of IWEl's shareholding in the Specified Wind SPVs to INR 592,87,50,000 ( "ORIX Revised Bid"); ii. Confirmation that INR 211,57,85,329 as the total outstanding principal and unpaid interest amount ( net of withholding tax) of promoter debt up to May 31, 2019, which is due to IEDCL from the relevant Specified Wind SPVs: and iii. an acknowledge that the said amount will be updated to account for the accrued interest on the closing date, and will be payable by ORIX in accordance with the provisions of the share purchase agreement. After that ORIX, vide its letter dated June 28, 2019, and July 5, 2019, confirmed the agreed form of the Share Purchase Agreement (Final SPA), which ORIX would execute with IWEL and the specified wind SPVs to conclude the acquisition of 51 % shareholding in each Specified Wind SPVs by paying the ORIX Revised Bid to IWEL. As per the directions of Hon'ble NCLAT, the said process of the sale was required to be approved by Justice D. K. Jain (Retd), thereafter, the entire details were submitted to Justice D. K. Jain (Retd) ,who approved the sale of the Specified Wind SPVs to ORIX and passed an ord....