While for the SP Group led by Shapoorji Pallonji Mistry, this is the second asset sale within a month after selling Eureka Forbes for Rs 4,400-crore to the American private equity Advent International, for Reliance this is the second solar acquisition in a day.
Earlier, RIL announced buying out the full equity in the Norwegian solar panel manufacturer REC Solar Holdings for $771-million from China National Bluestar Group Company. Both the deals are part of RIL chairman Mukesh Ambani’s last AGM announcement of investing Rs 75,000 crore into the green energy sector by 2030 when he plans to have 100 gw of solar power and also become a global player in the renewable industry.
Reliance is carrying out the deal through its fully-owned subsidiary Reliance New Energy Solar (RNESL), which “will acquire 40 per cent (post-preferential allotment to RIL) in Sterling & Wilson Solar (SWSL) through a combination of primary investment, secondary purchases and an open offer,” the companies said in a joint statement, without quantifying the deal value. It added RIL will get to nominate two board members.
Explaining the deal structure, a Reliance official said pre-deal SWSL has 16.04 cr equity shares. As part of the deal, RNESL will first infuse Rs 1,100 cr into SWSL for a 15.46 per cent equity through a preferential issue of shares aggregating to 2.93 cr, thus increasing the equity share of SWSL to 18.97 cr, of which Reliance will buy 40 pc via the sell down of 1.84 cr equity shares or 9.7 per cent of post-preferential shares by the promoters Shapoorji Pallonji & Company and Daruvalas at a price of Rs 375 per share - which is at a heavy discount to Friday’s closing price of Rs 434.80.
In the final step to meet the Sebi norms, RNESL will go in for a public offer to acquire up to 4.91 cr equity shares, or 25.9 pc of paid up equity post preferential issue. “Once the whole structure is completed Reliance will hold 40 per cent of the post preferential share capital or 7.59 crore shares at a price of Rs 375 per share, aggregating the total investment including a full subscription of the open offer at Rs 2,845 crore,” the official said. Reliance New Energy Solar is picking up shares from Shapoorji Pallonji & Company, Khurshed Daruvala (founding chairman) and SWSL.