CPPIB, Mubadala others in talks to buy India’s SBG Cleantech

Photo by Micheile Henderson on Unsplash

Japan’s SoftBank Group Corp. is in separate talks with Canada Pension Plan Investment Board (CPPIB), Mubadala Investment Co. and Brookfield Asset Management Inc. to sell its entire stake in Indian green energy firm SBG Cleantech, two people aware of the development said.

Bank of America (BofA) and Barclays have been hired to run the stake sale process by SoftBank, the people cited above said on condition of anonymity. The investment bankers will also help SBG Cleantech, a joint venture between SoftBank and Bharti Enterprises, to raise around $500 million through a sale of dollar bonds. Talks with CPPIB are at an advanced stage. SoftBank holds an 80% stake in SBG Cleantech.

While SoftBank is open to selling its entire stake, it is still trying to find a ‘significant’ minority investor.

SBG Cleantech has invested around $800 million for its 7.7GW Indian solar portfolio. The Economic Times on 1 July reported SBG Cleantech has approached Brookfield for $500-600 million.

Spokespersons for CPPIB and Bank of America declined to comment. Queries emailed to spokespersons for Bharti Enterprises, Mubadala, Brookfield and Barclays on Friday remained unanswered.

“The domestic solar capacity addition in FY19-20 has remained lower by about 15% than ICRA’s previous estimate (7-7.5GW), mainly on account of the disruption in supply chain and execution disruption in Q4 FY20 due to the covid-19 pandemic. The solar capacity addition in FY20-21 is further expected to remain subdued,” ICRA said in a note on Monday.

SoftBank has written multi-billion dollar cheques in India. The Japanese conglomerate, which started investing in India in 2011, has picked up stakes in several consumer internet firms in India and in the process made unicorns out of several of them.

“Earlier, the plan was to sell a big minority stake. Now, that conversation has broadened for an entire stake sale. While talks have progressed to an advanced level with CPPIB, they have also reached out to Mubadala and Brookfield,” said a person aware of the development cited above requesting anonymity.

Experts say for pension funds such as CPPIB, India fits the risk profile, given the markets here have matured. Also, these funds represent the so-called patient capital, which seeks modest yields over time.

Mubadala Investment Co. owns Masdar, also known as the Abu Dhabi Future Energy Co., which acquired around 20% in Hero Future Energies Pvt. Ltd in November for $150 million. Last month, it also bought a 1.85% stake in Jio Platforms for 9,093.60 crore.

This article was first published on livemint.com.

Singapore Reporter/s

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

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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.