Exclusive: Greenko founders buy Orix Corp.' 20% in Greenko Energy for $1.4 billion, announcement on Monday
AM Green B.V., owned by Greenko Group founders Anil Chalamalasetty and Mahesh Kolli, has purchased Japanese financial services firm Orix Corp.'s 20% stake in Greenko Energy Holdings in a $1.4 billion equity deal, two people aware of the development said.
The transaction, one of the largest deals in India's green energy sector that values Greenko Energy at $7.5 billion, will be announced on Monday, the people cited above said on the condition of anonymity.
Under the terms of the deal, Orix gets $650 million in cash, plus $750 million worth of stock amounting to 10% in AM Green through convertible notes. Chalamalasetty and Kolli will own the remaining 90% stake in AM Green. The deal is part of Orix's capital recycling strategy.
Once the transaction is concluded, Chalamalasetty and Kolli will hold 28% stake in Hyderabad-based Greenko Energy, through their personal stakes as well as the stake held by AM Green, while sovereign wealth funds GIC Holdings Pte. Ltd, and Abu Dhabi Investment Authority (ADIA) will hold 58% and 14% respectively.
The deal has been in the works for some time, and saw Orix terminating the deal on 25 April for not meeting conditions precedent.
AM Green Group president and Greenko Group president and joint managing director Mahesh Kolli declined to comment.
'A private credit debt of $650 million was raised for the deal. The initial plan was to complete the deal by end March; but a lot of conditions precedent were not met, that had led to the announcement of the termination of the deal," said one of the two people cited above.
Queries emailed to the spokespersons of Orix, Greenko, GIC, ADIA and AM Green on Friday evening remained unanswered.
Analysts say having GIC as a promoter has helped Greenko.
'Greenko's rating benefits from financial support and strategic oversight from 58% owner Singapore sovereign wealth fund GIC, which holds four of 13 board seats. GIC approves investment plans, oversees operations and manages risks," Fitch Ratings wrote in a 16 March report.
Mint earlier reported about GIC and Malaysia's Gentari Sdn Bhd investing $1.75 billion in AM Green Ammonia Holdings, a deal that ranked among the world's largest in energy transition. While Gentari will invest $1.5 billion for 30% in AM Green Ammonia Holdings, the founders will hold the balance 70% along with GIC, which will invest $250 million.
'This is an integrated play wherein Greenko takes care of upstream renewable power generation, and midstream storage through pump storage projects; wherein AM Green works on the downstream part involving molecule and materials manufacturing. While for the promoters, the first 15 years was about building a green energy business, the next 10 years is about the green energy transition business," said the first person.
Greenko has a 12 giga watt (GW) operational portfolio of wind, solar, hydro, and pumped storage projects; with another 20 GW under construction. It is also eyeing new areas of business including nuclear power, and participated in Nuclear Power Corp. of India Ltd's (NPCIL) process called for setting up small modular reactors for captive consumption. Greenko is also jointly developing India's largest electrolyzer plant of 2 GW annual production capacity with John Cockerill in Kakinada.
AM Green, on its part, has been putting the downstream piece together and is setting up production facilities for green molecules; including green hydrogen, green ammonia, biofuels, e-methanol, sustainable aviation fuels, and various downstream high-value chemicals, for decarbonization in hard-to-abate industries. It plans to produce 5 million tonnes per annum (mtpa) of green ammonia, with the first 1 mtpa project in Kakinada expected to be commissioned in 2026. The project, which includes a green hydrogen unit and ammonia conversion plant at a repurposed urea facility acquired earlier this year, will cost about ₹12,500 crore. AM Green has already signed offtake agreements with major buyers including Uniper, Yara, and Keppel.
AM Green is also investing in logistics to export its green ammonia abroad. In May, it signed an agreement with the Port of Rotterdam Authority to build a green energy supply chain between India and Northwestern Europe. In January, it partnered with global logistics major DP World to set up advanced logistics and storage infrastructure for green hydrogen and green ammonia exports. It has also partnered the world's second largest miner Rio Tinto through AMG Metals & Minerals to set up the biggest global green energy based aluminium production facility in India at an investment of around $6 billion for a 1 million tonne per annum (mtpa) aluminium smelter and a 2 million tonne alumina production facility in India.
India's green energy space has witnessed tremendous interest, given its green energy transition trajectory. India has an installed renewable energy capacity of 226.9 GW; of which solar and wind power account for 110.9 GW and 51.3 GW respectively. India's playbook is to add 50GW of green energy capacity annually to reach 500GW renewable capacity by 2030.
Attracted by India's green energy transition trajectory, there are several green energy deals in play including the Philippines' Ayala Corp.'s ACEN and UPC Renewables joint venture (JV) green energy platform— UPC Renewables India—plans to sell a significant stake in its upcoming 1GW projects in India; in a deal potentially valued at an enterprise value of around $600 million, as reported by Mint earlier.
However, there have also been some emerging concerns such as solar energy tariffs taking a nose dive, power demand in India's top six industrialized states flattening in April and cooling in May, power transmission evacuation constraints, and states not inking power purchase agreements (PPAs) and power supply agreements (PSAs) for awarded projects due to drop in tariffs in the subsequent bids. Mint earlier reported about renewable power capacity totalling nearly 30GW has failed to find buyers; with a capacity of at least 15GW is yet to find PPAs, while at least 14GW is awaiting PSAs.
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