Shriram Group is buying out indirect stake held by public listed group company Shriram EPC in renewable energy firm Orient Green Power Co Ltd and is also infusing Rs 150 crore ($27.7 million) afresh in the company, as per a market disclosure.
Orient Green, which went public a couple of years ago raising as much as Rs 900 crore and has lost over two thirds in market value since then, is backed by Olympus Capital and Bessemer Venture Partners who hold both direct and indirect stake in the venture.
Shriram Group’s privately held entity Shriram Industrial Holdings Private Ltd, which already owns 38.4 per cent of Shriram EPC, is buying out a Singapore based arm of Shriram EPC for Rs 148.2 crore ($27.4 million). Shriram EPC (Singapore) Pte Ltd in turn owns 37.7 per cent of another Singapore-based entity Orient Green Power Pte Ltd, which counts Olympus Capital and Bessemer Venture Partners as the other shareholders and owns majority stake (55.99 per cent) in Orient Green Power.
Shriram EPC, which is also backed by New Vernon Private Equity and Bessemer Venture Partners, also separately holds 0.08 per cent direct stake in Orient Green, which it would retain.
The twin transaction would give Shriram Group post equity dilution, indirect stake of around 35 per cent, as per VCCircle estimates.
The group has made an open offer to acquire another 26 per cent as the series of transaction would amount to an indirect acquisition of Orient Green. The open offer, if fully successful, would cost Shriram another Rs 222 crore, pushing up the total deal value to around $96 million.
The open offer has been made at Rs 15 a share, the same price at which it is subscribing to a preferential allotment to invest Rs 150 crore in Orient Green.
Orient Green share price rallied almost 10 per cent to close at Rs 14.35 on BSE after Shriram Group announced the deal in a flat Mumbai market on Monday.
Axis Capital is the manager to the open offer.
Chennai-based Orient Green Power Company was founded in 2006 and as of March 31, 2012, had portfolio with installed capacity to generate 366 MW bulk of it wind power. It had net revenues of Rs 251 crore with net loss of Rs 69.3 crore for FY12.
(Edited by Prem Udayabhanu)