India: Greenko Solar to acquire stake in Pennar’s renewable energy unit

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Pennar Industries Ltd (PIL), a Hyderabad-based engineering company, on Monday said its board has agreed to sell a stake in its subsidiary Pennar Renewables Pvt. Ltd to Greenko Solar Energy Pvt. Ltd, the solar energy arm of Greenko Energy Holdings.

Pennar Industries, established in 1988, is engaged in manufacturing precision engineering products such as cold rolled steel strips, precision tubes, railway coaches, pre-engineered building systems, sheet metal components and road safety systems.

According to a statement issued by Pennar Industries, once the transaction is completed, its consolidated debt will be reduced by Rs101 crore. “The proceeds from the sale of transaction will be used by the company to expand its product base and addressable markets,” the statement added.

Pennar Industries’ consolidated long-term and short-term debt stood at Rs296.5 crore as of 31 March.

Financial details of the transaction were not disclosed.

On Monday, shares of Pennar Industries surged 8.76% to close at Rs53.4 on BSE, while the benchmark Sensex rose 0.75% to 31,449.03 points.

The acquisition of Pennar Renewables is part of the growing trend of mergers and acquisitions in the Indian renewable energy sector.

Greenko itself has been an aggressive acquirer.

On 14 March, Mint reported that the Greenko group is looking to acquire hydro and wind power producer Bhoruka Power Corp. Ltd’s renewable energy portfolio of 310 megawatts (MW).

Last year, Greenko acquired the Indian assets of US solar power firm SunEdison for $392 million. Greenko was also one of the suitors to acquire 1.1 gigawatts (GW) of wind and solar assets of Welspun Renewables, which were eventually acquired by Tata Power Renewable Energy for around $1.4 billion.

Apart from strategic investors such as Greenko, the sector has also seen strong M&A action driven by financial investors.

Last month, IDFC Alternatives, the asset management arm of the infrastructure-focused lender, announced the acquisition of American solar panel maker First Solar’s 200MW of renewable power assets.

In April, Mint reported that infrastructure fund of Australia’s Macquarie Group Ltd had agreed to buy about 330MW of operational solar assets from power producer Hindustan Powerprojects Pvt. Ltd for an enterprise value of $600 million.

Financial investors Actis Llp and Equis Energy are also looking to sell their respective Indian renewable platforms—Ostro Energy Pvt. Ltd, and Energon and Energon Soleq.

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.