Nor­way’s Equinor eyes stake in Re­New Power

Gold­man Sachs, the lead in­vestor in the firm, and Abu Dhabi In­vest­ment Author­ity are look­ing to exit

Business Standard - - COMPANIES - SHREYA JAI

Nor­we­gian state-owned petro­chem­i­cals ma­jor Equinor is look­ing to pick a sub­stan­tial stake in Re­New Power. Gold­man Sachs, the lead and first in­vestor in Re­New with a 48.62 per cent stake, and Abu Dhabi In­vest­ment Author­ity (ADIA), which holds a 15.92 per cent stake, are look­ing to exit by di­lut­ing their stakes, a per­son in the know of the mat­ters said.

The per­son, who did not wish to be named, said Equinor’s in­ter­est in Re­New was dis­cussed when Erna Sol­berg, prime min­is­ter of Nor­way, came to In­dia last month. Equinor has op­er­a­tions in more than 36 coun­tries. Apart from petro­chem­i­cals, it also has busi­ness in­ter­ests in wind en­ergy and bio fuel.

De­tailed email queries to the spokesper­son of Re­New Power did not elicit any re­sponse.

Re­New had been look­ing for in­vestors af­ter it de­layed its plans for go­ing pub­lic, said a se­nior in­dus­try ex­ec­u­tive. Re­New filed draft red her­ring prospec­tus (DRHP) in May and planned to raise ~2,600 crore from the mar­ket. The IPO has not been launched yet.

“Our broad base of eq­uity in­vestors in­clude Gold­man Sachs, JERA, ADIA, CPPIB, ADB (sub­se­quently ex­ited) and GEF SACEF In­dia and have in­vested a to­tal of ~6,696.5 crore in our Com­pany in var­i­ous tranches over the years, help­ing us re­tain an ef­fi­cient cap­i­tal struc­ture with no mez­za­nine cap­i­tal in­stru­ments,” Re­New had said in its DRHP.

CPPIB in­vested $247 mil­lion in Re­New to as­sist the pur­chase of Ostro En­ergy. Re­New took over Ac­tis PE-backed Ostro, with to­tal as­set size of 5,600 Mw to in­crease its port­fo­lio ahead of the IPO. CPPIB was also look­ing to earn premium and exit through the IPO, ac­cord­ing to mar­ket sources. CPPIB owns 16.22 per cent stake in the com­pany.

Apart from Gold­man Sachs, Re­New has US-based Global En­vi­ron­ment Fund (GEF), ADIA and JERA as in­vestors. Re­New also had raised around $475 mil­lion from in­ter­na­tional and ~3,175 crore in masala bond is­sues in 2017. It en­tered the In­dian bond mar­ket in 2015 with three is­suances of ~400 crore, ~280 crore, and ~451 crore. The fol­low­ing year it raised an­other ~1,000 crore through three is­suances.

In 2017, Re­New closed a non-con­vert­ible deben­ture is­sue of ~2,265 crore to raise debt for its projects. The DRHP of Re­New men­tioned that of the to­tal net pro­ceeds, it will utilise ~1,950 crore to­wards re­demp­tion or early re­demp­tion of cer­tain deben­tures is­sued by the com­pany or its sub­sidiaries.

Equinor is learnt to have set up an of­fice in Delhi as well to co­or­di­nate for up­com­ing op­por­tu­ni­ties in the coun­try, ac­cord­ing to sev­eral re­ports. In Oc­to­ber 2018, El­dar Sae­tre, CEO, Equinor, told Reuters: “We are look­ing at In­dia both from oil and gas, but also from the re­new­ables. It’s a very early (stage), but we need to be on the ground.”

A re­new­able sec­tor ex­pert said there was a lot of room for con­sol­i­da­tion in the In­dian re­new­able mar­ket. “Com­pa­nies like these (Re­New) should not have is­sues find­ing new in­vestors as the port­fo­lio is good and re­turns are ex­pected to be healthy,” he said, “Go­ing from purely PE owned to giv­ing ma­jor­ity stake to a multi-na­tional en­ergy com­pany would be a par­a­digm shift.”

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