Stonepeak is fourth shortlisted bidder to acquire O2 Power for $1 billion

New Delhi: New York-based alternative investment firm Stonepeak has become the fourth shortlisted bidder to submit a binding offer to acquire Indian renewable energy platform O2 Power. The deal, which could be one of the largest green energy deals in the country, is expected to have an equity value of about $1 billion and an enterprise value of about $2.3 billion, two people familiar with the matter said.

Mint It was reported on September 11 that I Squared Capital, JSW Group’s JSW Neo Energy and Macquarie Group have been shortlisted as bidders to acquire O2 Power. Negotiations with Stonepeak are also ongoing to submit a binding offer.

“Stonepeak has been informed that they have been shortlisted from among the bidders who submitted an NBO,” said one of the two people, who requested anonymity.

Stonepeak manages $71.2 billion in assets and focuses on infrastructure and real assets. Seven bidders – I Squared Capital, JSW Neo Energy, Macquarie Group, Stonepeak, Edelweiss Alternative Asset Advisors’ Sekura Energy, Actis Llp and Singapore’s Sembcorp Industries Ltd – have submitted bids for O2 in a sale process run by Barclays non-binding offer. strength.

European alternative asset management company EQT and Singapore’s Temasek Holdings hold 51% and 49% of O2 Power respectively. They invested $500 million in the company, which was founded by former ReNew Power executives Parag Sharma, Peeyush Mohit and Rakesh Garg. O2 Power is targeting a portfolio of approximately 5 gigawatts (GW) and has already created a portfolio of 4 GW.

Spokespeople for Stonepeak, Barclays, Macquarie Group and O2 Power chief operating officer Peeyush Mohit all declined to comment.

“We decline to comment on speculation,” a Temasek spokesman said in an emailed response.

Inquiries emailed to spokespersons for I Squared Capital, JSW Group and EQT on September 18 remained unanswered.

These selected bidders will be given full access to the data room, after which binding bids will be submitted. The deadline to submit a binding offer is October 19, after which the successful bidder will receive exclusive rights to complete the transaction. The process generated a lot of interest, with 13 potential buyers signing confidentiality agreements for the sale of O2 Power.

There is continued investor interest in India’s renewable energy sector, including the solar sector.

“Renewable energy deal value is up an astonishing 70% year-on-year in 2023. This is based on consolidation in a highly fragmented space, which limits returns across the value chain. Case in point, the top five solar Power generation companies account for only 27% of the total installed capacity, while thermal power accounts for 45% of the total installed capacity. Going forward, more consolidation is expected with strong interest from foreign funds and multilateral agencies and an improving industry outlook,” SBI said. Capital Markets Ltd wrote in a report last month.

Also read: O2 Power acquires solar power portfolio in Karnataka, Telangana

India’s installed renewable energy capacity is 180.79 GW, of which solar installed capacity is 73.31 GW and wind power installed capacity is 44.73 GW. The government aims to add 50 GW of green energy capacity annually, reaching 500 GW of renewable energy capacity by 2030.

“India will account for 20% of Asia’s renewable energy M&A deal value in 2022/23 (according to Deloitte),” SBI Capital Markets reports. “The outlook for 2024 remains bright, with several deals in the commercial and industrial sector also booming, In addition to the mainstay of utility solar. “

Mint The deal follows reports that JSW Neo Energy and Sembcorp Industries Ltd have also been shortlisted to submit binding bids to acquire a majority stake in NIIF-backed Ayana Renewable Power Pvt Ltd. The equity value is approximately US$800 million. Separately, Sembcorp and JSW Neo Energy are vying to acquire a majority stake in 1 GW of operating assets from Shell’s Sprng Energy Group in a deal with an equity and enterprise value of US$350 million and US$1.1 billion respectively.