NARCL auctions Rs 3,763-crore debt of Wind World India

The National Asset Reconstruction Company (NARCL), a government-backed bad loan bank, is selling the debt of Wind World India. The debt, which was acquired for Rs 3,763 crore approximately 18 months ago, has a reserve bid set at Rs 1,250 crore.

Omkara ARC has emerged as the anchor bidder, matching the reserve bid of around $1,250 crore. This development brings the process to the first round of the Swiss Challenge auction, a method where a first bidder sets the price floor, and other interested parties are then given a chance to beat that bid.

The process is being overseen by IDBI Capital Markets, which is acting as the process advisor. The original committee of creditors, which includes major banks like IDBI Bank, State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Bank of India, Central Bank of India, and Axis Bank, had sold the distressed debt to NARCL.

Background on Wind World India

Wind World India was previously known as Enercon (India). The company went into insolvency after a dispute with its joint venture partners, Germany’s Enercon, and brothers Yogesh and Ajay Mehra.

The Corporate Insolvency Resolution Process (CIRP) for Wind World India was initiated on February 20, 2018, by IDBI Bank. The Ahmedabad bench of the National Company Law Tribunal (NCLT) had admitted a petition filed by IDBI Bank Ltd. to initiate insolvency proceedings against wind turbine manufacturer Wind World (India) Ltd. (WWIL).

The tribunal found that the company had defaulted on a massive debt of ₹856.11 crore (as of December 15, 2017) owed to the state-owned bank. The NCLT has appointed Shri Shailen Shah as the Interim Resolution Professional (IRP) to oversee the Corporate Insolvency Resolution Process (CIRP).

IDBI Bank, the financial creditor, had detailed a series of defaults by WWIL on working capital limits and non-fund based facilities like bank guarantees and letters of credit. Despite a Master Restructuring Agreement signed in March 2015 to provide relief, the company failed to meet its repayment obligations.

WWIL had opposed the petition, arguing that the debt was disputed due to the restructuring agreement and that the application was premature. The company cited external factors like a five-month workers’ strike, a sudden government policy shift from Feed-In-Tariff to reverse bidding for wind power, and the withdrawal of accelerated depreciation as reasons for its financial distress. It also claimed that a potential investor was ready for a one-time settlement, which the bank’s Joint Lenders’ Forum ignored.

However, the NCLT rejected these arguments. Relying on a Supreme Court judgment (Innoventive Industries vs. ICICI Bank), the tribunal held that its role was only to ascertain if a default had occurred, not to adjudicate disputes over the debt. It found that IDBI Bank had provided sufficient evidence of the default, making the admission of the case mandatory.

The company owed a total of Rs 4,710 crore to its 17 financial creditors. The resolution process has been significantly delayed by litigation. In 2020, a previous resolution plan submitted by Suraksha Asset Reconstruction Ltd was withdrawn after its approval by the Committee of Creditors due to these legal delays.

Key asset profile of Wind World (India) Limited is as under:

Daman Manufacturing Plant – Capacity of manufacturing 1,100 WTG sets annually i.e. 880 MW

Concrete Segment Pre-casting Yards (CSPYs) at Sadodar (Gujarat), Jajiya (Rajasthan), Gadag (Karnataka), Tirunvelli (Tamilnadu) – Capacity ~ 5 units per day

Operation & Maintenance Business – ~ 6,100 WTGs under Operation & Maintenance

Independent Power Producer– 98 WTGs with a total capacity of 63.8 MW

Development Rights – Inventory of ~ 6,300 MW

Wind World Training Academy at Valsad

Corporate Office at Andheri

31 Subsidiaries engaged in the business of sale of power, development rights, Setting up and maintaining substations and EHV Infrastructure, Acquiring land for WWIL, etc. The key assets in the subsidiaries are:

Power Evacuation and Grid Infrastructure

Development Rights – Inventory of ~ 5,500 MW

Independent Power Producer– Total capacity of ~500 MW

Also See: NCLAT dismisses plea to withdraw resolution plan for Astonfield Solar (Gujarat)