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
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.”