Canada’s CPP to take stake in ReNew Power

The Canada Pension Plan (CPP) Investment Board will buy a stake of up to 16.33% in Indian independent power producer ReNew Power Ventures Pvt Ltd, which is majority owned by Goldman Sachs Group Inc (NYSE:GS).

In a filing with the Competition Commission of India, CPPIB said it plans to acquire the stake in two separate transactions. Firstly, the Canadian investment manager is investing about USD 200 million (EUR 168.6m) in compulsorily preference shares that will be converted into equity once ReNew launches an initial public offering (IPO). The size of the interest in this part of the deal will depend on the valuation of the IPO and is not expected to exceed 10% of ReNew’s equity share capital.

As part of a second transaction, CPPIB will buy 6.33% of the Indian firm’s stock from the Asian Development Bank.

According to a report by the Economic Times, CPPIB’s investment in ReNew will represent a 14%-15% stake that will make it the third largest shareholder at the company. The newspaper cited unnamed industry sources as saying that the acquisition price is USD 350 million, valuing ReNew at USD 2.37 billion.

Earlier this year, Japanese power company JERA Co Inc, which is a joint venture between Tokyo Electric Power Co (TYO:9501) and Chubu Electric Power Co (TYO:9502), acquired a 10% stake in ReNew Power for USD 200 million in a deal that valued the Indian firm at USD 2 billion.

At present, ReNew Power has more than 2 GW of commissioned wind and solar capacity and an additional 1 GW of assets under construction, it says on its website.

(USD 1.0 = EUR 0.843)

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