Reliance Buys REC Group, 40% Stake In SP Group’s Solar Unit.
Reliance Industries Ltd announced a series of clean energy deals on Sunday, including the acquisition of REC Solar Holdings AS (REC group) and Sterling & Wilson Solar Ltd, underscoring billionaire Mukesh Ambani’s ambitions to grow his renewable energy portfolio quickly.
RIL’s unit, Reliance New Energy Solar, said it acquired the REC group from China National Bluestar (Group) Co. Ltd for an enterprise value of $ 771 million.
Later that day, Reliance announced that it had agreed to purchase a 40% stake in Sterling & Wilson Solar Ltd, a Shapoorji Pallonji group company (SP group), for approximately Rs 2,845 million at Rs 375 per share. That’s a 14% discount from the ₹ 434 per price that Sterling & Wilson Solar last traded on Friday.
“This (transaction) will allow us to deliver our end-to-end comprehensive ecosystem that leads to profitable green energy for Indian consumers,” Reliance President Ambani said in a statement.
The acquisitions come in quick succession after Ambani unveiled RIL’s boost of 75 billion rupees in clean energy over three years in June. RIL plans to spend ₹ 60,000 crore on four so-called giga factories. One of the four factories will manufacture solar photovoltaic (PV) modules.
“REC was the first to introduce mid-cut emitter and passivated back cell technology, which is adopted by all major manufacturers today, while REC has moved on to their next-generation heterojunction technology,” RIL said in a separate statement, adding that RIL plans to use this industry-leading technology at its fully integrated silicon metal photovoltaic panel manufacturing giga factory at the Dhirubhai Ambani Green Energy Giga Complex, Jamnagar, initially starting with a capacity of 4GW per year and eventually growing at 10GW per year.
In Sterling & Wilson Solar, Reliance New Energy plans to purchase a 15.56% stake through a preferred allocation of 29.3 million shares; 18.4 million shares, or 9.7% of the outstanding shares, of Shapoorji Pallonji and Co .; and 49.1 million shares, equivalent to a 25.9% stake, through an open offer under the country’s OPA regulations.
“Reliance New Energy will own 40% of the share capital of Sterling & Wilson, as a result of the acquisition in the open offering, the subsequent acquisition of shares in Shapoorji Pallonji and Co. and Khurshed Daruvala, and will be sold down if necessary “, RIL said in a statement.
RIL, which generates more than half of its revenue from refining and chemicals, is turning to clean energy with plans to establish the Dhirubhai Ambani Green Energy Giga Complex on 5,000 acres in Jamnagar, as Ambani announced at the annual shareholders meeting of RIL.
In addition to a giga factory of integrated solar photovoltaic modules, RIL also plans to establish giga factories for electrolyzers, fuel cells and energy storage, respectively.
As part of its green energy pivot, RIL also plans to help establish 100 GW of solar power by 2030.
“The acquisition of REC will help Reliance with a ready global platform and the opportunity to expand and grow in key green energy markets globally, including Europe, the United States and Australia,” said RIL. Sterling & Wilson Solar has a strong team of 3,000 and a presence in 24 countries.
It provides a range of turnkey solar energy solutions, including design, procurement, construction, project management, and operations and management. Khurshed Daruvala will remain as president and lead Sterling & Wilson’s next phase of growth, the company said.
For the Shapoorji Pallonji group, the transaction comes after it sold its flagship consumer durable products Eureka Forbes Ltd last month for ₹ 4,400 crore.
It will help the group reduce its 20 billion rupee debt, of which 10.9 billion rupees is under a one-time restructuring package under the Reserve Bank of India’s covid-19 aid framework regulations. The group also plans to sell a stake in Afcons Infrastructure.
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