The Mahindra Group and Ontario Teachers’ on Saturday announced forming a strategic partnership under which they will invest around Rs 4,550 crore to grow future portfolios of Mahindra Susten Private Ltd (MSPL), a renewable energy platform of the former.
“Mahindra Group and Ontario Teachers’ have agreed to invest an amount of around Rs 4,550 Crores to grow MSPL’s future portfolio,” a regulatory filing said.
The filing showed that under MSPL, a subsidiary of Mahindra Holdings Ltd (MHL) and 2452991 Ontario Ltd (2OL) have inked share purchase agreement and shareholders’ agreement under the strategic partnership.
The agreements provide for selling 30 per cent equity by MHL in MSPL to 2OL for a cash consideration of Rs 711 crore, it showed.
Mahindra Holding Ltd (MHL), a subsidiary of Mahindra & Mahindra Ltd, will sell additional 9.99 per cent of the paid-up equity share capital of MSPL to any other investor(s) or 2OL or any of its affiliates (Ontario Teachers’) by 31th May, 2023, showed a regulatory filing.
It also stated that the pacts also provide for formation of an Infrastructure Investment Trust (InvIT) with MSPL and Ontario Teachers’ as Sponsors, which will own identified operational assets housed in Special Purpose Vehicles (Project SPV).
Mahindra Group and Ontario Teachers’ Pension Plan Board (Ontario Teachers’) have formed a strategic partnership to capitalise on the growing renewables opportunity in India and contribute towards the country’s decarbonization ambitions, a company statement said.
The parties have signed binding agreements pursuant to which Ontario Teachers’ will acquire a 30 per cent equity stake in MSPL at an equity value of Rs 2,371 crore (USD 300 million).
The InvIT is initially proposed to comprise renewable power assets seeded by Mahindra Susten with operational capacity of around 1.54 GWp.
As part of the proposed transaction, shareholder loans of Rs 575 crore (USD 73 million) advanced by Mahindra Group to Mahindra Susten will be repaid.
As a result of this transaction, Mahindra Group will receive an inflow of approximately Rs 1,300 crore (USD 165 million), it stated.
Mahindra Group will deploy these funds, plus an incremental amount of up to Rs 1,750 crore (USD 220 million), into the business & InvIT over the next seven years, it stated.
Over the same period, Ontario Teachers’ has committed to deploy an additional amount of up to Rs 3,550 crore (USD 450 million) into the business and the InvIT over the next seven years, it also said.
This transaction will enable Mahindra Susten to build a strong renewable energy business focused on solar energy, hybrid energy, integrated energy storage & round-the-clock (“RTC”) green energy plants.
Puneet Renjhen, Member of Group Executive Board and EVP, Partnerships & Alliances at the Mahindra Group said in the statement, “The partnership with Ontario Teachers’ will enable the Mahindra Group to unlock value in the renewable energy sector with continued joint investments towards accelerated growth.”
Bruce Crane, Senior Managing Director, Asia Pacific, Infrastructure & Natural Resources at Ontario Teachers’ said in the statement, ” This strategic partnership marks the beginning of what we hope will be a long-term and mutually beneficial relationship with the Mahindra Group.”
Deepak Thakur, Managing Director & Chief Executive Officer, Mahindra Susten said in the statement, “This partnership with Ontario Teachers’ syncs with Mahindra Susten’s plan to substantially grow our green energy portfolio across solar PV, wind, and energy storage. This platform will leverage our proven experience in development and deep knowledge of the Indian energy market.”
Mahindra Susten is Mahindra Group’s renewable energy platform, which includes one of the leading renewable engineering, procurement and construction (EPC) businesses (capacity constructed of over 4 GWp), an independent power producer (IPP) business with around 1.54 GWp of operational solar plants spread across several states in India, and plan to have a significant solar development pipeline.
Ontario Teachers’ Pension Plan Board (Ontario Teachers’) is a global investor with net assets of (Canadian Dollar) C$242.5 billion as on June 30, 2022.
With PTI Inputs