Mahindra Group and Ontario Teachers’ to form a strategic partnership in the renewable energy space
Source：EQUITY BULLS
From：Taipei World Trade Center Liaison Office in New Delhi
Update Time：2022/10/10
Mahindra Group and Ontario Teachers' Pension Plan Board ("Ontario Teachers") announced today a strategic partnership to capitalize on the growing renewables opportunity in India and contribute toward the country's decarbonization ambitions. The parties have signed binding agreements pursuant to which Ontario Teachers' will acquire a 30% equity stake in Mahindra Susten Private Limited ("Mahindra Susten") at an equity value of INR 2,371 crore (-USD 300 million).
The proposed transaction also envisages the setting up of an Infrastructure Investment Trust ("InvIT") in compliance with applicable regulations of the Securities and Exchange Board of India. The InvIT is initially proposed to comprise renewable power assets seeded by Mahindra Susten with an operational capacity of around 1.54 GWp. As part of the proposed transaction, shareholder loans of INR 575 crore (-USD 73 million) advanced by the Mahindra Group to Mahindra Susten will be repaid.
As a result of this transaction, Mahindra Group will receive an inflow of approximately INR 1,300 crore (-USD 165 million). Mahindra Group and Ontario Teachers' will jointly explore the sale of an additional 9.99% stake in Mahindra Susten by May 31, 2023. Mahindra Group will deploy these funds, plus an incremental amount of up to INR 1,750 crore (-USD 220 million), into the business & InvIT over the next seven years.
Over the same period, Ontario Teachers' has committed to deploy an additional amount of up to INR 3,550 crore (-USD 450 million) into the business and the InvIT over the next seven years.
This transaction will enable Mahindra Susten to build a strong renewable energy business focused on solar energy, hybrid energy, integrated energy storage & round-the-clock ("RTC") green energy plants.
Puneet Renjhen, Member of Group Executive Board and EVP, Partnerships & Alliances at the Mahindra Group, said: 'We are delighted to welcome Ontario Teachers' as a strategic partner in Mahindra Susten. The partnership with Ontario Teachers' will enable the Mahindra Group to unlock value in the renewable energy sector with continued joint investments towards accelerated growth. The Mahindra Group aims to be Planet Positive by 2040 and the continued inflow of patient, long-term capital in our climate-positive businesses is a validation of our commitment to being a global ESG leader."
Bruce Crane, Senior Managing Director, Asia Pacific, Infrastructure & Natural Resources at Ontario Teachers' said: 'We are pleased to continue making significant investments in India and to acquire a meaningful stake in Mahindra Susten, one of India's leading renewable energy platforms. As part of our climate change strategy, we have committed to continue growing our portfolio of green assets around the globe with investments like Mahindra Susten. This strategic partnership marks the beginning of what we hope will be a long-term and mutually beneficial relationship with the Mahindra Group."
Source: https://equitybulls.com/category.php?id=320143