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NEW DELHI : Adani Green Energy Ltd has agreed to buy Japan’s SoftBank Group Corp. and Bharti Enterprises Ltd’s solar power unit SB Energy Holdings Ltd for an equity value of around $625 million, said two people aware of the development.

The deal, which has an enterprise value of around $3.5 billion, follows the collapse of an earlier plan to sell SoftBank’s entire 80% stake in SB Energy to Canada Pension Plan Investment Board (CPPIB). India’s Bharti Global Ltd holds the remaining 20% stake.

The three parties on Wednesday signed share purchase agreements for the transaction, according to a statement issued jointly by Adani Green, SoftBank and Bharti. The deal is expected to be completed by August after receipt of regulatory and other approvals. “Of the total equity value, while around $500 million is expected to be SoftBank Group Capital Ltd’s share, the balance around $125 million may go to Bharti Global Ltd’s for its stake," one of the two people cited above said, seeking anonymity.

Spokespersons for SoftBank Group and Bharti Enterprises declined to comment on the deal’s equity value. Queries emailed to an Adani Group spokesperson on Wednesday remained unanswered.

Adani Green began its due diligence for SB Energy last week, as reported by Mint earlier. SB Energy, which has a paid-up capital of 5,439 crore, had in July 2020 dropped a plan to raise $600 million via a dollar bond. SoftBank has invested over $800 million in the business in the past five years. Mint reported on 6 July 2020 about SoftBank’s plan to exit SB Energy in a shift from its earlier plan to find a significant minority investor, and its separate talks with CPPIB, Canada’s Brookfield Asset Management Inc. and Abu Dhabi’s sovereign wealth fund Mubadala Investment Co. for sale.

SoftBank’s planned deal with CPPIB was in the works for around a year, with CPPIB placing several pre-conditions for SoftBank before finalizing the transaction. These included meeting certain project commissioning deadlines, securing new businesses, bond issuance as well as SoftBank bearing any future liquidated damages liability for acquiring the stake, as reported by Mint earlier.

SB Energy India has a total renewable portfolio of 4,954 megawatts (MW) across four states in India, according to the joint statement. “The target portfolio consists of large scale utility assets with 84% solar capacity (4,180MW), 9% wind-solar hybrid capacity (450MW) and 7% wind capacity (324MW). The portfolio comprises 1,400MW operational solar power capacity, and a further 3,554MW is under construction," the statement added.

SB Energy posted a revenue of 1,015 crore in the last financial year, up from 687 crore and 440 crore in 2019-20 and 2018-19, respectively.

France’s Total had earlier invested $2.5 billion to buy a 50% stake in 2.35 gigawatts (GW) operating solar assets of Adani Green as well as a 20% stake in the Indian company. With a 19.3GW portfolio that includes 4.5GW that is yet to be awarded, the Adani-Total JV plans to commission 25GW by 2025.

“This transformational acquisition will enable Adani Green to achieve its target renewable portfolio of 25GW four years ahead of the target ," according to the joint statement.

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