Eversource Capital and JSW Neo Energy are the two bidders shortlisted to acquire a controlling stake in Morgan Stanley-backed Continuum Green Energy, the enterprise value of which is pegged at $1.5 billion, according to people in the know.
The two bidders were among five that submitted non-binding indicative offers in early April. They will now conduct due diligence on the company before they submit firm financial offers, according to sources.
The others that submitted non-binding offers were Statkraft, iSquared Capital and a consortium involving an investment firm, which could not be identified. Eversource Capital and JSW Neo Energy’s non-binding offers are said to be higher.
Continuum Green Energy is 83% owned by Morgan Stanley. Founders own the remaining stake. Continuum chief executive officer Arvind Bansal was unavailable for comment. Eversource Capital and JSW Neo Energy declined to comment.
“It’s not certain a transaction will take place,” said an executive familiar with the stake-sale process.
This is the third time that Morgan Stanley has initiated a formal process to sell its stake in the Mumbai-headquartered green energy producer founded by IIM Ahmedabad classmates Arvind Bansal and Vikash Saraf in 2009. Citi is advising on the stake sale.
JSW Neo Energy is a subsidiary of the listed JSW Energy, which has been set up for the company’s green energy expansion. Sajjan Jindal-led JSW Energy is aiming to build a 10 GW electricity generation business by 2025. Of this, 65% will be electricity generated through renewable energy sources such as wind and sunlight. It acquired the green energy business of Mytrah Energy for an enterprise value of Rs. 11,934 crore in August.
Eversource Capital is fund manager of a green growth equity fund established with anchor investments from India’s National Infrastructure and Investment Fund (NIIF) and the UK’s Foreign, Commonwealth and development office (FCDO).
In the past, US-based Sun Edison group and Statkraft came close to acquiring the company in independently run processes but both attempts failed.
Continuum Green Energy has ramped up its portfolio of operating wind and solar power plants. It has operating power plants that produce over 1 gigawatt of electricity. It also has projects with an energy producing capacity of 2.5 GW in the pipeline.
It owns and operates India’s largest, 226.8 MW wind-solar, co-located hybrid project in Tamil Nadu and is in the process of building a similar 250 MW wind-solar hybrid project in Gujarat.
Sun Edison had attempted an acquisition of the company in 2016 but that fell through because it was unable to close the deal. Sun Edison filed for bankruptcy in the US the same year. Norway’s Statkraft held discussions to acquire Continuum Energy in 2019, but a deal did not materialise.
North Haven Infrastructure Partners, a global infrastructure fund managed by Morgan Stanley Infrastructure Partners, invested $212 million in Continuum Energy in 2012.
