Re-New Power Ventures has finalised the takeover of Ostro Energy for an enterprise value of ₹10,800 crore ($1.66 billion), the biggest M&A deal in the renewables sector.
This deal is now way ahead of Tata Power Renewable Energy, which, with its ₹9,249 crore acquisition of Welspun’s assets in June 2016, is in the second spot with total renewable assets of around 2,300 MW.
ReNew will pay around ₹4,500 crore as equity, while the remaining ₹6,300 crore will be the debt component.
Ostro Energy, set up in June 2014 which is backed by London-based private equity firm Actis, which invested $280 million in the company in early 2015. Actis invests exclusively in emerging markets and currently has interests across 21 countries. However, Actis has been looking for a profitable exit from Ostro for nearly a year now and had appointed Bank of America Merrill Lynch to find a suitable buyer.
Ostro Energy, has commissioned wind assets of 648 MW and another 350 MW are in the pipeline. It is also building around 110 MW of solar projects, making it a total of 1,108 MW across the states of Andhra Pradesh, Telangana, Karnataka, Rajasthan, Gujarat and Madhya Pradesh.
“ReNew believes these are excellent assets of a quality that few players in the country have, since most of them are operational, they also mitigate the risks associated with Greenfield projects.”