Adani Green to buy SB Energy India for an enterprise value of $3.5 billion


NEW DELHI : Adani Green Energy Ltd (AGEL) is set to buy Japan’s SoftBank Group Corp. and Bharti Enterprises Ltd owned solar power producer SB Energy India for an enterprise value of $3.5 billion, the firms said in a joint statement on Wednesday.

This follows the collapse of a plan to sell SoftBank’s entire 80% stake in SB Energy to Canada Pension Plan Investment Board (CPPIB) for an estimated $525 million.

Adani Green had begun due diligence of SB Energy last week as reported by Mint earlier. The sale follows SB Energy dropping its plan in July 2020 to raise $600 million through a dollar bond. SoftBank has invested more than $800 million in the business in the past five years.

“Adani Green Energy Limited (AGEL), today signed share purchase agreements for the acquisition of 100% interest in SB Energy India from SBG (80%) and Bharti Group (20%). SB Energy India has a total renewable portfolio of 4,954 MW spread across four states in India,” the statement said.

France’s Total has invested $2.5 billion for acquiring a 50% stake in 2.35GW operating solar assets of AGEL and a 20% stake in AGEL. With 19.3 GW portfolio, the Adani-Total JV plans to commission 25GW by 2025.

“This transformational acquisition will enable AGEL to achieve its target renewable portfolio of 25 GW four years ahead of the target timeline,” the statement added.

The diversified Adani Group has been on an acquisition spree to grow its green energy portfolio. It recently bought Sterling and Wilson Pvt. Ltd’s 75 megawatts (MW) operating solar projects and Toronto-based SkyPower Global’s 50MW solar project in Telangana. Adani Enterprises Ltd has also partnered EdgeConneX to develop 1GW of data centre capacity over the next decade that will be powered by renewable energy.

“The target portfolio consists of large-scale utility assets with 84% solar capacity (4,180 MW), 9% wind-solar hybrid capacity (450 MW) and 7% wind capacity (324 MW). The portfolio comprises of 1,400 MW operational solar power capacity and a further 3,554 MW is under construction,” the statement said.
Mint reported on 6 July 2020 about SoftBank’s plan to exit SB Energy in a shift from its earlier plan to find a significant minority investor, and its separate talks with CPPIB, Canada’s Brookfield Asset Management Inc. and Abu Dhabi’s sovereign wealth fund Mubadala Investment Co. for the sale.

“With this acquisition, AGEL will achieve total renewable capacity of 24.3 GW (1) and operating renewable capacity of 4.9 GW,” the statement said.

The valuation of SB Energy in the proposed deal with CPPIB was lower than the one expected by the renewable energy industry. SoftBank’s deal with CPPIB that got dropped was in the works for around a year, with CPPIB placing several preconditions for SoftBank before finalizing the transaction. These included meeting certain project commissioning deadlines, securing new businesses, bond issuance as well as SoftBank bearing any future liquidated damages liability for acquiring the stake, as reported by Mint earlier.

There has been sustained interest in India’s green economy despite the turmoil caused by the pandemic. Another case in point being private equity firm Actis Llp close to buying a majority stake in 500 megawatts of solar projects in India owned by Finland’s state-controlled power utility Fortum Oyj.

News Source:- Livemint

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