Gensol West Asia ops look to part ways with parent

A mid mounting scrutiny over alleged financial irregularities in India, solar power firm Gensol Engineering Ltd's West Asia operation is exploring a potential separation from its embattled parent company.

- Rituraj Baruah & Utpal Bhaskar

Two people aware of the development said the Dubai-headquartered middle-east arm, which holds significant solar project contracts worth AED 175 million (₹406.75 crore), is considering the move to mitigate the fallout from its India troubles.

"There is a plan being discussed to delink Gensol's West Asia operations from the parent company to sequester it from the India fallout," one of the two people cited above said, requesting anonymity.

"The plan also includes returning AED 25 million to the parent company."

The AED 25 million (₹58.10 crore) had been initially transferred by the Ahmedabad-headquartered company to establish its MENA (middle east and north Africa) presence, which includes subsidiaries such as Green Energy Trading LLC-FZ-UAE and Gensol Renewables DW LLC-UAE.

Experts believe such a separation is feasible under certain conditions.

"Any plan of hiving off an arm of a company in such instances can be taken up as long as the company is not admitted to insolvency resolution," said Manoj Kumar, partner and head of M&A and investment banking at Corporate Professionals.