ReNew Power has sold its Karnataka wind farms to UK-government backed Ayana Renewable for Rs. 1600 crore, according to people aware of the matter.
The two parties signed definitive agreements for the transfer of ReNew’s portfolio of windfarms located in four Karnataka districts of Raichur, Bijapur, Belgaum and Bellary over the weekend putting an end to six months of negotiations that took place in the run-up to the deal. The windfarms can generate 300 megawatts of energy.
ET had first reported on the deal discussions in its edition on 3 June.
The deal discussions are said to have dragged over a legal dispute between the Karnataka government owned power distribution company and ReNew Power which is yet to be resolved. The completion of the deal is not incumbent upon resolution of the dispute. ReNew is a supplier of power to the Karnataka discom.
ReNew Power declined to comment. Ayana Renewable did not respond to queries.
The deal with Ayana will help ReNew Power reduce debt and generate cash.
The Goldman Sachs-backed company is exploring sale of parts of its portfolio as a strategy to ‘monetise’ assets that are mature and have generated returns for shareholders, according to sources.
“ReNew will look at such asset sales to churn capital. There are long-term investors who are willing to pay good value for assets that can generate assured income for several years such as wind power plants. With its strong construction capability the company can use this to its advantage”, a source close to the company said.
The company is expected to use the gains realized from such profitable divestments for re-investment in new energy projects, this source explained.
ReNew Power had acquired a cluster of windfarms in Karnataka as part of its Rs. 10,000 crore acquisition of Ostro Energy, a renewable energy platform owned by private equity group Actis, two years ago.
The Delhi-headquartered green energy major that was founded by former investment banker and first generation entrepreneur Sumant Sinha exactly a decade ago has quickly ramped up capacities and is arguably the largest renewable energy company in India with 8.65 gigawatts of wind and solar energy generation capacity.
The company has also mounted debt in the meanwhile as part of its expansion drive. Its latest available balance sheet shows it has a debt burden of over Rs. 25,000 crore. It generated total income of Rs. 4790 crore in fy 2018-19.
Ayana Renewable is owned by UK government’s development finance arm, CDC Group. India’s national investment and infrastructure fund (NIIF) and Eversource Capital are also investors in Ayana.
