A subsidiary of London-listed clean energy producer Greenko Group PLC has raised $70 million from Standard Chartered Plc in what appears to be a structured transaction. The investment has been routed through Greenko Mauritius.
The transaction seems to be structured in a way that will ensure minimum returns to Standard Chartered, with upside on any listing. "The investment by Standard Chartered is drawable within a period of six months and is structured to be part-redeemable at a fixed return and part-convertible into equity shares at a fixed rate of return," Greenko has said in a filing.
"The convertible tranche entitles Standard Chartered to participate in the IPO of any of Greenko subsidiaries or any intermediate holding company. In the event that an IPO at any of Greenko's subsidiaries is not achieved, Standard Chartered has the right to convert the investment into the Group’s main holding company at the mutually agreed internal rate of return," it has added.
Standard Chartered will also have minority protection rights and the right to nominate directors on Greenko Mauritius.
Backed by PE firms like TPG Growth and Aloe Environment Fund, Greenko has recently raised $50 million from GE Energy Financial Services (at the subsidiary level of Greenko Wind Project) for expansion of its wind energy business. Because of these deals with StanChart and GE, Greenko has become fully funded to expand its capacity to 1 GW.
"Greenko strongly believes that it will benefit from Standard Chartered's strong expertise and ability to deploy its balance sheet through debt solutions into its projects. Standard Chartered has demonstrated investment expertise in the renewable space through mobilisation of $ 6.4 billion in debt and equity globally since 2008," the filing stated.
The deal is also Standard Chartered’s first investment in the Indian renewable energy industry. This year, it has also invested in Redington India, Ravi Jaipuria’s Varun Beverages and GMR Infrastructure’s airport arm.
"We are delighted to partner with Standard Chartered, a leading global bank with a committed focus on sustainable energy investments. This, coupled with its strong presence in India, will provide us with financing solutions that might greatly enhance the return profile of Greenko's project assets and shareholder value," said Anil Chalamalasetty, CEO and MD of Greenko.
"This investment expands our presence in one of the world's fastest growing power markets, with a local and proven renewable energy developer, and is in line with our client-centric investment philosophy. Standard Chartered intends to support Greenko and propel it to the next stage of growth," said Nainesh Jaisingh, global co-head (private equity) of Standard Chartered.
Greenko operates 182.6 MW in current capacity across wind, hydroelectric, natural gas and biomass assets, and aims to reach 1 GW of operational capacity by 2015. Greenko, which was initially focused on hydro and biomass-fired plants, expanded into wind energy last year. Its portfolio is split across 104.3 MW of hydro, 41.5 MW of biomass and 36.8 MW of gas/liquid fuel. Greenko’s portfolio, which includes projects in the development pipeline, currently stands at 1.63 GW.
Greenko reported 130 per cent increase in turnover in 2011 to $59.4 million (€44.4 million), with profit before tax up 188 per cent at $18.72 million (€14 million) for 2011.