Keppel eyes Warburg Pincus’ stake in CleanMax

NEW DELHI :
Singaporean conglomerate Keppel Corp. is among suitors for Warburg Pincus LLC’s majority stake in rooftop solar power producer CleanMax Enviro Energy Solutions Pvt. Ltd, said two people aware of the development.

The proposed transaction is valued at around $200 million, with Rothschild handling the sale process, said the people cited above, requesting anonymity. The deal value includes new investments in Mumbai-based CleanMax, they said.

“The deal contours involve sale of Warburg Pincus’ stake and to raise more capital for future investments,” said one of the two people cited above.

Mint could not immediately ascertain the names of the other suitors for CleanMax.

The potential transaction could rank among the largest so far in India’s solar rooftop space, underscoring growing consolidation in the commercial and industrial (C&I) segment. Considering the regulatory risks over green energy contracts and their enforcement in several states, investors are increasingly looking at the C&I space as it is generally insulated from risks such as power procurement curtailment and tariff-shopping by state-run distribution companies (discoms).

In July 2017, CleanMax said it has secured equity financing of as much as $100 million from Warburg Pincus. The other investors in CleanMax are the International Finance Corp. (IFC) and UK Climate Investments LLP (UKCI), a joint venture between Green Investment Group and the UK government’s department for business, energy and industrial strategy. UKCI is managed by Macquarie Infrastructure and Real Assets.

Kuldeep Jain, founder and managing director of CleanMax, did not respond to phone calls, text messages and an emailed query. Spokespersons for Warburg Pincus and Macquarie Group declined to comment.

An external spokesperson for Rothschild said in an emailed response: “I have been mandated by the principals, M/S Rothschild & Co., Global Advisory to post that the firm has no comments to offer on your mail.”

Queries emailed to the spokespersons of Keppel Corp. and IFC late Wednesday remained unanswered till press time.

With S$6.6 billion annual revenue, Keppel is present in businesses such as offshore and marine, energy and environment, connectivity, urban development and asset management.

The potential deal comes against the backdrop of distributed renewable energy generation attracting strong investor interest as the market has few developers with large portfolios. CleanMax’s operating capacity has jumped from 24MW in 2015-16 to around 805MW now.

CleanMax’s portfolio includes 380MW of large-scale solar farms in Karnataka and Tamil Nadu that supply electricity to corporate customers and 220MW of solar rooftop projects. It has also expanded its portfolio in West Asia, with a 30MW portfolio in the United Arab Emirates and is exploring further expansion in South-East Asia. It also got its first project in Thailand.

“Warburg Pincus, the primary financial sponsor of CleanMax, has been looking to exit for some time now,” said the second person cited above.

Mint reported on 25 October about Warburg Pincus exploring the stake sale.

Despite the Indian clean energy space facing headwinds, deal activity has largely remained unaffected by the pandemic. A case in point being Actis Llp close to buying a majority stake in 500MW of solar projects in India owned by Finnish state-controlled power utility Forum Oyj as reported by Mint earlier.

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