India’s ReNew Power has announced a merger agreement with a US-based special-purpose acquisition corporation as it seeks to become a publicly listed company on the NASDAQ.
The Goldman Sachs-backed renewable power producer’s transaction with NASDAQ-listed RMG Acquisition Corporation II (RMG II) implies an enterprise valuation of around $8 billion. The transaction is expected to close in the second quarter of 2021.
Upon completion of the transaction with RMG II, the combined entity would be named ReNew Energy Global PLC and expected to be listed on the NASDAQ under the new ticker symbol “RNW.”
“The pro forma consolidated and fully diluted market capitalization of the combined company would be approximately $4.4 billion at the $10 per share private investment in public equity (PIPE) subscription price, assuming no RMG II shareholders exercise their redemption rights. Gross cash proceeds are estimated to be approximately $1.2 billion, comprised of $855 million from the PIPE and approximately $345 million of cash held in trust by RMG II, before any adjustments due to potential redemptions by RMG II shareholders,” according to a joint statement by Renew Power and RMG II.
ReNew’s management, and its current group of stockholders, including Goldman Sachs, the Canada Pension Plan Investment Board (CPP Investments), Abu Dhabi Investment Authority, and JERA Co., Inc. (JERA), among others, who together own 100% of ReNew today, will be rolling a majority of their equity into the new company, and are expected to represent approximately 70% of the effective company ownership upon transaction close.
ReNew’s leadership will remain intact, with Sumant Sinha as Chairman & Chief Executive Officer of the combined company, overseeing its strategic growth initiatives and expansion.
According to the joint statement, net proceeds of approximately $610 million would be used to bolster ReNew’s leading position in solar and wind energy generation for the Indian market, by funding medium-term growth opportunities, as well as pay down debt.
Sumant Sinha, founder, chairman and chief executive officer of ReNew, said. “Over the next decade, ReNew plans to maintain its track record of market share growth, and contribution to the greening of the Indian power sector, and to help meet the Indian government’s ambitious renewable energy targets. Over time, we will expand our capabilities even further, with utility-scale battery storage, and customer focused intelligent energy solutions.”
RMG II is a blank check company formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or other similar business combination with one or more businesses. It intends to capitalize on the ability of its management team to identify, acquire and operate businesses across a broad range of sectors that may provide opportunities for attractive long-term risk-adjusted returns.
Earlier this month, the company announced the closing of its initial public offering of 48,300,000 units, resulting in gross proceeds of $483,000,000.
“When we closed our IPO in December, we were looking to partner with a company driving change on a global scale, with a proven track record, and best-in-class management,” remarked Bob Mancini, Chief Executive Officer and Director of RMG II. “We found that company in ReNew.” “Its commitment to measured growth through long-term partnerships with Indian central and state government agencies, scale, technological innovation, and strong financial position should enable ReNew to take advantage of the incredibly positive trends in the Indian power market over the next decade and beyond.”
Founded in 2011, ReNew is India’s leading renewable energy independent power producer (IPP), and among the top 15 largest renewable IPPs globally by capacity, with a portfolio of more than 100 operational utility-scale wind and solar energy projects spread across nine Indian states. The company also owns and operates distributed solar energy projects for more than 150 commercial and industrial customers across India.
ReNew is presently the only company in the Indian renewable energy sector with over 5 GW of operational capacity. The company currently has an aggregate capacity of close to 10 GW (including capacity won in competitive bids).
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