After roping in half a dozen private equity investors, London-listed clean energy producer Greenko Group plc is raising $150 million or £100 million from GIC Singapore, one of the world’s largest sovereign wealth funds. Greenko, one of India’s largest independent power producers in the renewable energy space, is raising money through its Mauritius arm to increase its operating capacity to 2,000 MW by 2018, double the 1,000 MW target for 2015.
GIC Singapore will invest in Greenko Mauritius and its stake will be convertible into Greenko Group plc at a price of 260p per share, subject to final adjustment, between July 1, 2015, and June 30, 2017. This will be 77 per cent premium to Greenko’s closing price of 147p per share on Monday. The investment will be equivalent to a minimum of 19.5 per cent to maximum of 29.99 per cent of Greenko Group on a fully diluted basis, according to filings.
According to the AIM-listed firm, the funds will be used to “accelerate construction of Greenko’s substantial power portfolio and take advantage of the currently attractive power opportunities in India, through the deployment of utility scale wind farms and Himalayan run-of-river hydro projects.”
GIC Singapore will have the right to appoint to two directors on the board of Greenko Mauritius. Arden Partners plc and Macquarie Capital Advisors (India) Pvt Ltd were advisors to Greenko for the transaction.
GIC Singapore, which has over $100 billion under management, has invested in Indian infrastructure firms like power utility player GVK Energy and the state-run power utility NTPC.
The deal will be the largest PE investment in India’s green energy sector after Morgan Stanley Infrastructure Partners’ $212 million deal with Continuum Energy and Goldman Sachs’ $200 million investment in ReNew Wind Power.
Greenko Group currently has an operating capacity of 309 MW while 390 MW of projects are under construction that include 188 MW of run-of-river hydro projects and 202 MW of utility scale wind farms. All these projects will be commissioned within the next two years. Greenko also added six new run-of-river hydro projects, totalling 425 MW to its active development pipeline in its Himachal Pradesh and Arunachal Pradesh clusters.
Greenko has also been an aggressive buyer of clean energy assets across the country, which included hydro power projects in Himachal Pradesh and Karnataka for $54 million.
For the six months period ending September 2012, Greenko’s reported revenues increased 19.5 per cent to €23.7 million or $30.65 million while the adjusted profit after tax was up 121.2 per cent to €4.2 million or $5.4 million.
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Greenko Group has also raised funding from Standard Chartered Private Equity and Global Environment Fund (GEF) at the Mauritius level. In late 2011, Greenko’s wind energy holding company raised $50 million from GE Energy Financial Services.
Also, direct PE shareholders in the Greenko Group, Aloe Private Equity (11.2 per cent stake) and TPG Capital (8.1 per cent stake), have given their consent for the deal, along with Greenko directors who hold 17 per cent stake. The company has called for an EGM on April 4, 2013, to approve the deal.
Other shareholders in Greenko Group include M&G Investments (12 per cent), Blackrock Investment Management (5.6 per cent), Impax Asset Management (5.2 per cent) and Capital Group (7.3 per cent).
(Edited by Sanghamitra Mandal)