Mumbai: Continuum Wind Energy, a renewable energy firm controlled by Morgan Stanley Infrastructure Partners, is in talks with private equity firm Olympus Capital Asia to raise structured credit financing of around Rs450 crore ($70 million), two people aware of the development said.
Morgan Stanley Infrastructure Partners, which manages over $4 billion globally, invested $212 million in Singapore-based Continuum Wind in 2012. The India-focussed Continuum was set up in 2009 by Arvind Bansal and Vikash Saraf.
“Continuum is currently in talks to raise structured credit financing from Olympus Capital Asia. They are talking about raising around Rs300-450 crore from Olympus. The talks are at an advanced stage," said one of the two people cited above, requesting anonymity as the talks are private.
The capital would be used by Continuum to refinance part of its existing debt obligations, he added.
Morgan Stanley and Olympus Capital declined to comment on the development. Emails sent to Arvind Bansal did not elicit any response.
In July, Continuum withdrew an offshore dollar bond issuance, aimed at refinancing the company’s debt obligations. According to a Financial Express report, Continuum Wind was looking to raise around $400 million through the proposed bond offering.
Continuum has a portfolio of about 2.2 gigawatts (GW) of generation capacity, of which around 404 megawatts (MW) is operational, 150MW is under construction, 450 MW is ready to construct, and the rest is under development, rating agency Fitch Ratings said in a July note rating the proposed bond issuance.
Olympus Capital, founded in 1997, has invested more than $2 billion of equity capital in over 50 portfolio companies throughout Asia, including China, India, Japan, South Korea and South-east Asia, according to the fund’s website.
Olympus Capital provides structured credit financing through its arm Olympus Capital Asia Credit (OCA Credit), which was set up in 2013.
OCA Credit provides structured lending solutions to mid-sized corporations that are underserved by commercial banks or that seek alternatives to private equity funding. It focuses on South-east Asia, India, Australia and North Asia. The firm typically provide $20-100 million in structured loans with two- to three-year maturities as senior, subordinated and junior debt, acquisition financing and special situations.
If the deal goes through, it will be the second renewable energy transaction for Olympus Capital in India.
In January, Mint reported that wind turbine maker Suzlon Energy Ltd was raising Rs800 crore (around $120 million) from private equity investors Asia Climate Partners (ACP) and Olympus Capital Asia to create a renewable energy platform.
Olympus’s other investment in India include companies such as Aster DM Healthcare Ltd, Quatrro Global Services Pvt. Ltd and Vishwa Infrastructure and Services Pvt. Ltd.
The renewable energy sector has seen several structured credit financing deals over the last couple of years.
In September, renewable energy company Mytrah Energy India Pvt. Ltd raised $277 million (about Rs1,800 crore) from the Piramal Group. Piramal’s financial services business is also a lender to ACME Solar and to the promoters of Renew Power Ventures.