The stake sale of IL&FS’s 50% stake in Indian Ports Rail and Logistics (IPRWL) is facing a hurdle.A consortium of Indian Oil Corporation (IOC) and Adani Group is involved in the proposed sale.
Reportedly, IOC is concerned about the high debt levels of IPRWL and the uncertainty surrounding the company’s port operations. IPRWL, a joint venture between IL&FS and IOC, operates the Ennore port in Tamil Nadu.
The consortium of IOC and Adani offered Rs 1,200 crore to acquire IL&FS’s stake in IPRWL. However, IOC now wants a lower valuation for the stake.IOC also demands a larger share of IPRWL’s debt to be taken on by the consortium.If the deal doesn’t go through, it would be a setback for IL&FS.
IL&FS is aiming to sell assets to repay its debt.
The deal holds significance for IOC as well, as it intends to expand its port operations. IPRWL is a well-managed port and acquiring it would provide IOC a foothold in the south Indian market.
The course of negotiations between IOC and the consortium remains uncertain. However, it is likely that the deal will be renegotiated or potentially abandoned altogether.
