As part of deleveraging its stretched balance-sheet, the Shapoorji Pallonji Group is divesting its second key asset within a month via a multi-stage transaction.

As the first step of the deal, Reliance New Energy Solar will get a preferential allotment of 2.93 crore equity shares (equivalent to 15.46 per cent of the post- preferential share capital) at a price of ₹375 per share for approximately ₹1,100 crore. Then it will acquire 1.84 crore equity shares or 9.7 per cent post preferential share capital from Shapoorji Pallonji & Company at a price of ₹375 per share; and then thirdly it will go for public offer to acquire up to 4.91 crore equity shares, representing 25.9 per cent in accordance with Sebi takeover regulations. After all this, the RIL arm will hold 40% in Sterling & Wilson Solar, the joint statement said.

Mukesh Ambani-led Reliance New Energy Solar has beaten bulge-bracket private equity funds such as Brookfield, the Canadian pension fund CPPIB and also the largest private sector domestic power producer Adani Power in bagging Sterling & Wilson Solar, which is among the world’s largest solar EPC solutions provider. The deal goes a long way for the SP Group to cut debt which at the group level is around ₹20,000 crore.

Sterling will also convene shareholders meet on 2 November, 2021 to approve the sale of shares to RIL. 

Sterling & Wilson Solar closing on Friday was ₹434/share.

Speaking about the transaction, Mukesh Ambani, Chairman of Reliance Industries, said, “We welcome SWSL as a strategic partner towards building our New Energy platform. SWSL, with its engineering talent, deep domain knowledge, global presence, and experience of executing some of the most complex projects globally, will become an important part of our solar value chain. This will enable us to deliver our comprehensive, end-to-end ecosystem leading to cost-efficient green energy for Indian consumers. We have great respect for Khurshed Daruvala and the world class institution that he has built over the years and look forward to collaborating in making SWSL a global EPC and O&M leader.” 

Shapoor Mistry, Chairman of Shapoorji Pallonji & Co. Pvt. Ltd, said: “We are happy to welcome Reliance in Sterling and Wilson Solar Ltd. Through the decades, spanning three generations, the Shapoorji Pallonji group has helped Sterling and Wilson become a global leader in providing turnkey solutions in the energy value chain.” 

Khurshed Daruvala, Chairman of SWSL said, “Along with the Shapoorji Pallonji Group we have made SWSL a global leader in providing turnkey solutions in the energy value chain. Reliance, with its integrated new energy vision, and a commitment to put India on the global green energy map, provides us a great opportunity to further establish SWSL as the leading EPC solutions provider globally. I am sure this partnership will give SWSL new energy and excitement, and we look forward to becoming part of creating history.”

Earlier today, the oil-to-telecom-to-retail conglomerate announced the acquisition of Norway-based solar panel manufacturer REC Solar Holdings for $771 million as its first move towards creating a multi-billion-dollar clean energy portfolio to become net carbon zero by 2035. 

Reliance New Energy Solar Ltd (RNESL), a wholly-owned subsidiary of RIL, acquired “100% shareholding of REC Solar Holdings AS (REC Group) from China National Bluestar (Group) Co Ltd for an enterprise value of $771 million,” the firm said in a statement. 

The acquisition will help the Indian giant expand in green energy markets globally, including the US, Europe, Australia and elsewhere in Asia. REC makes solar grade polysilicon and solar panel and modules at facilities in Norway and Singapore, and has more than 1,300 employees globally, the statement said. Reliance said it will use REC’s technology to manufacture metallic silicon and solar panels at its gigafactory at Jamnagar in Gujarat, with initial annual capacity of 4 gigawatts, eventually rising to 10GW.