ACTIS IN RACE FOR FORTUM’S SOLAR ASSETS
NEW DELHI: Canada’s Brookfield Asset Management Inc., private equity firm Actis Llp and Edelweiss Infrastructure Yield Plus Fund’s Sekura Energy Ltd have offered to buy a majority stake in Finnish state-run power utility Fortum Oyj’s 500 megawatts (MW) solar projects in India in a deal estimated at about half a billion euros, said two people aware of the development.
The three parties have submitted three separate non-binding bids for the deal, which is expected to be completed by March, the people cited above said, requesting anonymity. Kotak Investment Banking is managing the sale process.
“The bids have been placed, and there has been substantive interest in these assets. The sale process is expected to be completed by March,” one of the two people cited above said, requesting anonymity. Sanjay Aggarwal, managing director of Fortum India Pvt. Ltd, declined to comment. Spokespeople for Brookfield and Edelweiss also declined to comment. Queries emailed to spokespeople for Kotak Investment Banking and Actis on Friday remained unanswered.
The stake sale is part of Fortum’s strategy to take risks early on and eventually monetise projects to raise capital for new ventures. About half of the 500MW projects on offer is currently operational and the remainder is nearing completion.
In addition to selling a controlling stake in the existing projects, the deal also involves bringing these 500MW solar projects under a new platform, in which new investors will contribute significant equity to develop projects in India and overseas. Mint reported on 1 June last year about Actis, Brookfield, Edelweiss Infrastructure Yield Plus Fund, Canada Pension Plan Investment Board (CPPIB), KKR and Macquarie Group evincing interest in Fortum’s solar assets in India.
Fortum, the third-largest Nordic utility, plans to develop around 500MW each year in India and overseas.