ReNew Power acquires RMG Corporation for $8 Bn
Upon closing of the transaction, the combined company would be called ReNew Energy Global PLC and The trade would further bolster ReNew's leading position in solar and wind energy production for the Indian market, by funding medium-term expansion opportunities, as well as paying down debt.
ReNew was the first Indian renewable energy company to cross legged capability milestones of 1 Gigawatt (GW) and two GW, and is currently the only company from the Indian renewable energy industry with more than 5 GW of operational capacity. The Company now has an aggregate capacity of near 10 GW (including capacity already won in competitive bids).
ReNew's growth has been aided by steady cash flows, procured through long-term contracts with wellregarded counterparties. Currently, ReNew's total utility-scale committed capacity is contracted below Power purchase agreements (PPAs) with a mean duration of more than 24 decades. Over the previous ten years, ReNew has also forged a robust and well diversified community of suppliers, allowing adoption of the greatest technologies, at optimal cost, across its projects portfolio.
Beyond production of clean power, ReNew has also developed experience in ancillary areas like energy storage. In 2020, ReNew won two exceptional tenders floated by SECI to ensure firm, dependable, and affordable supplies of green power.
Throughout 2020, ReNew also entered into the emerging electronic services business, with the purchase of Climate Connect, a Pune, India-based company, and a leading participant in AI-enabled grid control and load forecasting.
ReNew's business model is reinforced by recent trends in the Indian power generation market, as well as The Indian government's green power goals during the next ten years. India's per capita electricity consumption is poised for rapid growth in the next decade, with approximately two-thirds of this incremental demand being met by electricity from renewable sources. India's global climate responsibilities regarding reduction of carbon emissions will dictate a transformational shift in the power generation mix -- away from fossil fuels, in favor of renewables. At exactly the exact same time, the government's ambitious goal of 450 GW of installed renewables capacity by 2030, a 5x increase over current levels, indicates huge market potential. A continuous reduction in costs of creation, driven by technological improvements and wellcontested auctions will further accelerate renewables adoption.
"The renewable renewable energy sector has grown quickly over the last decade," stated Sumant Sinha, Creator, Chairman & Chief Executive Officer of ReNew. "During this time, ReNew has been a driving force in making certain that the resources of the growth are sustainable, and economically competitive. Over the next decade, ReNew intends to maintain its track record of market share growth, and contribution to the greening of the Indian energy industry, and to help fulfill the Indian administration's ambitious renewable energy targets. As time passes, we'll expand our capabilities even further, with utility-scale battery storage, and client focused intelligent energy solutions. ReNew's vision is to improve its standing as a worldwide pioneer in the clean energy area, to continue leading India's continuing clean energy transition, and to assist in deepening electrification and decarbonization of the Indian market."
"When we closed our IPO in Decemberwe had been looking to associate with a business driving shift on a Global scale, with an established history, and best-in-class management," remarked Bob Mancini, Chief Executive Officer and Director of RMG II. "We discovered that company in ReNew, and are excited to be partnering with a remarkably talented management team, led by Sumant. Our diligence on ReNew affirmed that the firm was not only the leading, but the best-positioned renewable energy company in India. Its dedication to measured expansion through longterm partnerships with Indian central and state government agencies, scale, technological innovation, and solid financial standing should enable ReNew to make the most of the incredibly positive tendencies in the Indian electricity market over the next decade and beyond. We're proud to be part of this incredible story."
"Since our founding venture with Sumant Sinha, ReNew Power has illustrated our focus on supporting strong management teams and fast-growing market leaders in renewable energy," explained Michael Bruun, a Managing Director from the Asset Management Division of Goldman Sachs. "We have been pleased to welcome lots of the planet's most well-known shareholders to associate with us over recent years. With this milestone event, we are pleased to find an even larger variety of investors become part of the significant ESG journey."
The pro forma consolidated & fully diluted market capitalization of the combined company would be approximately $4.4 billion at the $10 per share PIPE subscription cost, assuming no RMG II shareholders exercise their redemption rights. Gross cash profits are estimated to be roughly $1.2 billion, comprised of $855 million from the PIPE and roughly $345 million of money held in trust by RMG II, prior to any adjustments because of possible redemptions from RMG II shareholders.
Proceeds will be used to encourage ReNew's growth strategy, including the buildout of its own contracted, utilityscale renewable power generation capacity, and to decrease debt. ReNew's management, and its current Set of stockholders, including Goldman Sachs, the Canada Pension Plan Investment Board (CPP Investments), Abu Dhabi Investment Authority, along with JERA Co., Inc. (JERA), amongst others, who together own 100% of ReNew today, will probably be rolling a majority of their equity into the new firm, and are expected to represent about 70% of their effective company ownership upon transaction close.
ReNew's leadership will Stay intact, together with Sumant Sinha as Chairman & Chief Executive Officer of this Combined company, overseeing its strategic growth initiatives and expansion.