Renew Power to merge with RMG for US listing
NEW DELHI: Goldman Sachs backed Renew Power Ventures Pvt. Ltd on Wednesday took a step closer to a US listing by announcing a merger agreement with RMG Acquisition Corp. II (RMG II), a Nasdaq-listed special purpose acquisition company (SPAC).
The transaction puts an enterprise value of around $8 billion on Renew Power, and is expected to close in the second quarter of this year, the two companies said in a joint statement.
SPACS are publicly traded shell companies which merge with unlisted companies to take them public, skipping the conventional route of initial public offerings (IPOS). Renew Power deal comes against the backdrop of Indian green energy developers exploring the SPAC route, which has emerged as a popular alternative to IPOS.
According to the joint statement, net proceeds of $610 million from the listing will fund future projects and help pay down debt. The overall $1.2 billion equity proceeds include a private investment in public equity (PIPE) deal of $855 million, which involves private placement of common stock in Renew Power and $345 million in cash held by RMG II.
“The pro forma consolidated and fully diluted market capitalisation of the combined company would be approximately $4.4 billion at $10 per share PIPE subscription price,” the statement said.
The merger comes at a time when India’s electricity demand
has been growing and recorded a high of 189.6 gigawatt (GW) in December. India has been rapidly expanding clean energy capacity at low tariffs and has a target of achieving a 450GW renewable energy capacity by 2030.
While Goldman Sachs and Morgan Stanley are financial advisors to Renew Power, Bank of America is the financial advisor to RMG II.
Mint reported on February 15 about Renew Power’s SPAC plans at a valuation of almost $4 billion, and its discussions with RMG Acquisition owned by Nasdaq-listed SPAC Riverside Capital Management. Renew Power had shelved its Indian IPO plan in 2019 amid volatility.
Exiting investors will hold a 70% stake in the combined entity—renew Energy Global Plc—which will be listed on Nasdaq under the new ticker symbol “RNW”.
“The PIPE and SPAC (special purpose acquisition company) investors will hold 20% and 10%, respectively in the combined entity,” Sumant Sinha, Renew Power chairman and managing director told