OPEN APP
Home >Industry >Energy >ReNew to announce merger with RMG Acquisition at $3.7-bn pre-money valuation

ReNew to announce merger with RMG Acquisition at $3.7-bn pre-money valuation

While pre money valuation is the equity value before the new round of financing, the post money valuation includes the fresh round of capital injection. Photo: iStockPremium
While pre money valuation is the equity value before the new round of financing, the post money valuation includes the fresh round of capital injection. Photo: iStock

  • The merger will be followed by a private investment in public equity (PIPE) deal, wherein existing shareholders may offer their shares for sale. Also, new shares may be issued, resulting in new money of around $1.2 billion.

Goldman Sachs backed ReNew Power Ventures Pvt. Ltd is set to shortly announce its merger with RMG Acquisition owned by Nasdaq-listed SPAC Riverside Capital Management at a pre money valuation of $3.7 billion, said two people aware of the development.

The merger will be followed by a private investment in public equity (PIPE) deal, wherein existing shareholders may offer their shares for sale. Also, new shares may be issued, resulting in new money of around $1.2 billion.

Also Read | Bitter home truths for migrant workers

While pre money valuation is the equity value before the new round of financing, the post money valuation includes the fresh round of capital injection. Several Indian green energy developers are exploring their listing in the US through this fast-emerging SPAC (special purpose acquisition company) route.

Post the merger, the name of SPAC will be changed to reflect the new identity, with ReNew Power’ existing shareholders including Goldman Sachs, Canada Pension Plan Investment Board (CPPIB), Japan’ JERA Co. Inc., Abu Dhabi Investment Authority (ADIA), GEF SACEF India and founder and chairman and managing director Sumant Sinha holding around 92.5% stake in the merged entity. The balance will be held by Riverside Capital Management.

Mint reported on 15 February about ReNew Power planning to list its shares in the US through the fast-emerging SPAC route at a valuation of almost $4 billion. ReNew Power had shelved its Indian initial public offering plan in 2019 amid market volatility.

“There is around $300 million in the SPAC. The moment the merger takes place, ReNew Power becomes a listed entity," said one of the two people cited above requesting anonymity.

This comes in the backdrop of NASDAQ listed RMG Acquisition Corp. II,

a special purpose acquisition company closing its $345 million IPO in December.

“The pre money equity value is $3.7 billion. There is also $1.2 billion new money," said the second person cited above, who also did not want to be named.

While Goldman Sachs and Morgan Stanley are bankers for ReNew Power, Bank of America was leading the SPAC discussions for Riverside Capital Management.

Spokespersons for ReNew Power, Goldman Sachs, ADIA, and JERA declined comment.

Queries emailed to the spokespersons of Riverside Capital Management and Bank of America on late Tuesday night remained unanswered.

Queries emailed to CPPIB spokesperson on late Tuesday night also remained unanswered till the time of publishing this story. Mint couldn’t immediately contact Morgan Stanley.

ReNew Power is also raising funds through asset sales and plans to set up a 2 giga watt (GW) cell and module manufacturing facility in India.

ReNew Power generates 5.73 GW of energy through solar and wind assets and has another 4.41 GW under various stages of development throughout the country. In 2018, it acquired 1.1 GW of wind and solar power assets from Ostro Energy—one of the biggest acquisitions in the Indian renewable energy space for an enterprise value of around $1.5 billion.

For the April-September 2020 period, ReNew Power’s total income stood at 782.5 crore as compared to 576.6 crore for the same period in 2019. Its total loss ballooned to 230.4 crore during April-September as compared to 26.7 crore in the year-ago period.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Click here to read the Mint ePaperMint is now on Telegram. Join Mint channel in your Telegram and stay updated with the latest business news.

Close
×
Edit Profile
My ReadsRedeem a Gift CardLogout