IL&FS sells environment biz to pare Rs 1,200 cr debt

Bankrupt Infrastructure Leasing & Financial Services (IL&FS) has sold the entire stake in the waste management arm IL&FS Environmental Infrastructure & Services (IEISL) and its subsidiaries to EverEnviro Resource Management (EverEnviro), an arm of the PE major Everstone Group, the companies said in separate statements.

Though the value of the deal was not specifically disclosed, the crippled IL&FS -- which is under bankruptcy proceedings in NCLT -- said the sale will reduce its overall debt by Rs 1,200 crore, which is the combined debt of entities under the group's environment businesses.

IL&FS Environmental Infrastructure & Services (IEISL) is one of the leading integrated waste management companies that is into municipal solid waste management apart from presence across various segments including construction and demolition, collection and transportation and waste to energy and currently manages over 8,400 tonnes per day solid municipal waste.

After IL&FS promoters and management duped the company and cooked its books, the engineering and construction-focused NBFC major was sent to bankruptcy courts by the government in August 2019 and was placed under special management led by banker Uday Kotak.

IL&FS, which owed over 65,000 crore to the system, held 97.54 per cent of equity in IEISL and the balance 2.46 per cent was held by IL&FS Employee Welfare Trust.

The entire shareholding in IEISL, held by the IL&FS Group, has been transferred to EverEnviro, which is a 100 per cent owned arm of the green growth equity fund (GGEF), managed by EverSource Capital, an equal joint venture between  Everstone Group and the British green energy major Lightsource bp, the release said.

The IEISL subsidiaries sold are Dakshin Dilli Swachh Initiative, Swayam Swachatta Initiative, RDF Power Projects, East Delhi Waste Processing Company and Kanak Resources Management and all of them are part of this transaction and have also been transferred to EverEnviro, it said.

These subsidiary companies run the country's first Euro norms-compliant integrated waste to energy plant located at Ghazipur in east Delhi, which has generated over 141 million units of green electricity by processing over 1.38 million tonnes of solid waste.

The plant will mitigate 8.2 million tonnes of greenhouse gases over the life of the project.

The group's collection and transportation contracts deploy over 800 vehicles in Delhi, Ahmedabad, and Washim in Maharashtra.

It also runs the largest organic municipal sold waste to bio-CNG project in Indore of 500 TPD.

IL&FS said as part of the transaction, around 4,000 employees, including consultants, will be transferred along with the businesses to the new owner, which would effectively result into an annual savings of close to Rs 50 crore to it.

EverEnviro managing director Parvez Umrigar said this is one of the largest deals in solid municipal waste management in the country and is also a landmark investment that will pave the way for them to become a leading integrated waste management platform player in the country.

EverSource Capital manages the green growth equity fund which was established with anchor investment from the National Investment & Infrastructure Fund and the British government-run Department for International Development.

EverSource Capital chief executive Dhanpal Jhaveri said waste management is a key element of a circular economy and forms a core of their investment strategy.

This acquisition accelerates our agenda of promoting and investing in clean and sustainable businesses to achieve the climate change objectives and the sustainable development goals on one hand and contribute to the government's vision of sustainable development on the other, he said.

EverEnviro is fully-owned subsidiary of the green growth equity fund, the leading climate fund in the country managed by EverSource Capital.

Photograph: Danish Siddiqui/Reuters