ET Now

In a chat with ET Now, Deepak Asher, Gujarat Fluorochemicals, says the company is largely exiting wind business as it is selling about 240 MW of the 260 MW company to JP Morgan-backed Leap Green.

Edited Excerpts:

You have decided to sell the wind farm business or the subsidiary Inox Renewables, this means you are going to focus on the core business, can you just confirm what is the sale consideration?

That is not in the public domain and because of confidentiality reasons, we cannot disclose that but I can confirm that Inox Renewables which was a 100 per cent subsidiary of Gujarat Fluorochemicals operated about nine different wind projects in four different states with an aggregate capacity of about 260 MW and we have sold about 240 megawatts of this to JP Morgan backed Leap Green, subject to certain conditions pitched in which are expected to be completed over the next three to four months time’.

The deal value estimated is around Rs 1300 crore. Is that a fair number to go by even though you may not confirm the exact consideration?

I cannot confirm that. That is not in the public domain and confidentiality clauses in the agreement prevents us from disclosing that.

What would the amount that you have received be used for reducing consolidated debt? How much can you bring down the debt by?

The debt in the wind farming business is about Rs 800 crore. So obviously, the consideration will be used to either extinguish that debt or transfer the debt to the buyer. At the consolidated level, the debt of Gujarat Fluorochemicals would go down by about Rs 800 crore.

And what is the size of the wind projects that Leap Green Energy will be getting from you which will make them perhaps the largest independent wind power company?

As I mentioned it is about 240 megawatts.

Inox Renewables had recently won 250 megawatts of wind projects in Tamil Nadu at a historic low tariff bid of about 2.97 per unit. Will it now be developed as part of your wind turbine manufacturing business which has been retained?

There seems to be a little bit of confusion on this account. We had two separate entities in two different verticals in the wind energy space, there was Inox Wind which was a manufacturer of wind turbines and an EPC developer for third party investors and there was Inox Renewables where we owned an IPP business so what we have sold is the wind farms in Inox Renewable.

The bid that you mentioned, has been won by Inox Wind and that actually will be used to develop these projects and sell them off to eventual investors. So that will not entail any capital infusion by Inox Wind but you could look at that as in incremental order book for Inox Wind but has nothing to do with this transaction.

What is the order book that you are sitting on and going by your focus on the core businesses, tell us what are you gearing up for over the next couple of years?

Again, as I clarified, that is in another entity Inox Wind and this conversation was essentially to do with this transaction. So, unfortunately I do not have the details of that at this point of time.

What is the strategy for Gujarat Fluoro? What can we look forward to?

Gujarat Fluorochemicals obviously is focusing on growing its core business which is the chemical business. We are present in the caustic soda, chlorine market, in the chloromethane market, in the refrigerant HCFC-22 market and the fluoropolymer which is PTFE business. We are also expanding or rather growing our presence in flouro speciality chemicals and other fluoropolymers. So, we are focusing on growing those businesses. In addition, Gujarat Fluorochemicals also owns significant stake in their multiplex business which is Inox Leisure and the wind turbine manufacturing business. We are going to focus on growing those businesses as well.