India: Canada’s Brookfield in talks to acquire Mytrah Energy

Key Speakers At The Brookfield Asset Management Inc. Annual General Meeting Photo: Bloomberg

Canada’s Brookfield Asset Management Inc. is in talks to buy a majority stake in Hyderabad-based Mytrah Energy as the alternative assets manager looks to make its first renewable investment of more than $1 billion in India, said three people aware of the development.

“Brookfield has been engaged in talks to acquire a majority stake in Mytrah and they are currently conducting due diligence on the company’s portfolio of renewable assets,” the first person cited above said, requesting anonymity.

The stake sale could be valued at more than $1 billion, reaching up to nearly $1.5 billion given the size of Mytrah’s portfolio, he added. Mytrah has a portfolio of around 1.6 GW, the person said.

If successful, the Brookfield-Mytrah deal will also be the largest transaction in the Indian renewable space in terms of size of the portfolio. Previous mega deals in the space include ReNew Power’s acquisition of 1.1 GW portfolio of Ostro Energy in 2018at approximately $1.54 billion and Tata Power Renewable Energy’s acquisition of 1.14 GW portfolio from Welspun Renewables in 2016 for close to $1.4 billion.

Mytrah operates renewable projects across Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, Andhra Pradesh, Telangana, Karnataka, Punjab and Tamil Nadu.

The second person cited above said a potential deal will help repay a large loan raised by Mytrah from the Piramal group. “In fact, the need to repay this loan is one of the triggers for the sale of the portfolio,” he said.

In September 2017, Mytrah raised 1,800 crore ($277 million) from the Piramal Group through non-convertible debentures. It used the funds to provide exit to existing investors: IDFC Alternatives Ltd, AION Capital, Merrill Lynch and Goldman Sachs, besides meeting its growth capital needs.

Brookfield declined to comment on the development. A spokesperson for Piramal Group said the group does not comment on market speculations. Emails sent to Mytrah did not elicit any response.

To be sure, this is not the first time Mytrah has held discussions to sell its portfolio. Mint reported in August 2018 that Canada’s largest pension fund manager Canada Pension Plan Investment Board (CPPIB) was in talks to acquire a majority stake in Mytrah.

If the deal goes through, it will be the first major renewable investment by Brookfield in India.

Brookfield owns around 300 megawatts of solar assets in India, but it added the portfolio following the global acquisition of SunEdison’s yieldco Terraform Global Inc., which it acquired for $750 million in December 2017. Terraform had a portfolio of 952 MW of solar and wind assets in Brazil, India and China.

Mint reported in July 2018 that Brookfield was looking to ramp up its focus on the Indian renewable sector and hired Nawal Saini, a director, from Canada’s second largest pension fund Caisse de dépôt et placement du Québec (CDPQ)’s for its India team.

Brookfield’s investments in India have so far focused largely on infrastructure and real estate.

The investor has approximately $47 billion in assets under management globally in its renewable energy business, with 930 power-generating assets and over 2,500 employees across hydro, wind and solar energy segments. It owns 7,900 MW of hydroelectric power generating assets, around 4,800 MW of wind assets and 1,400 MW of solar assets.

This article was first published on livemint.com

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.