13.6.16

Tatas Buy Welspun's Green Energy Unit

Tata Power Company said its subsidiary Tata Power Renewable Energy has signed an agreement with Welspun Energy to buy its renewable energy unit Welspun Renewables. The deal size is estimated at . Rs.10,000 crore ($1.4 billion). The company, however, did not disclose the financial details of the deal.
Welspun Renewables has about 1,140 MW of renewable power projects, comprising about 990 MW of solar power projects and about 150 MW of wind power projects spread across ten states in India, a statement by Tata Power said. This will be the largest solar project acquisition in Asia and among the largest renewable sector M&As in the continent.
Of the 1,140 MW renewable portfolio of Welspun Renewables, nearly 1,000 MW of capacity is operational and the rest is under advanced stages of implementation. Welspun Renewables has one of the largest operating solar portfolios in India.
Welspun Renewables is a 100% subsidiary of Welspun Energy, which in turn is co-owned by the listed Welspun Enterprises. BK Goenka, chairman of Welspun Group, and serial entrepreneur Vineet Mittal, who is also the managing director of the business, are the other key shareholders of Welspun Renewables, along with a clutch of foreign financial investors.
Tata Power's renewable arm currently operates 294 MW of renewable power capacity and 500 MW of renewable assets are being carved out of Tata Power to bring them under TPREL through a court process. In addition, the company has almost 400 MW of solar and wind power projects under implementation. Thus, with all these assets, TPREL would have a renewable assets portfolio of about 2,300 MW after the conclusion of the deal, making it the largest renewable power company in India. The Tatas will pay Rs.3,650 cr as the equity component of the deal, sources said. The rest is debt, which will be refinanced with lender approvals.
Barclays and JM Financial were the financial advisors to the deal, while KPMG India Private Limited was the accounting & tax advisor. AZB & Partners acted as the legal advisor for the transaction.
The Tata offer has trumped the closest competing proposal from a consortium of IDFC Private Equity and Finnish clean energy multinational Fortum by at least 15-20%, said the sources.
The other serious contender in fray was Greenko Group Plc, a Hyderabad based renewable energy company controlled by GIC, the sovereign wealth fund of Singapore.

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