The transaction adds 5 GWp of renewable capacity to ABRen’s existing 9.3 GWp portfolio, putting the conglomerate on course to cross 20 GWp and build one of India’s largest clean energy platforms
The Aditya Birla Group has finalized a deal to obtain Sprng Energy from Shell at an enterprise value of Rs 17,200 crore, which is around $1.8 billion. This is probably one of the biggest deals in the renewable energy sector in India when considering both the amount involved and the scale of it along with considering this purchase so seriously in terms of pushing the clean energy ambitions ahead for the group.
The Structure of the Deal
The acquisition will be made through Aditya Birla Renewables Ltd, a subsidiary of Grasim Industries that will acquire Solenergi Power Pvt Ltd, the holding company of Sprng Energy Group. The deal is going to be executed using a lot of debt and some equity because Grasim Industries will invest some money in the deal along with some fund management from Global Infrastructure Partners and other money equity. The amount of money that Shell will get as part of equity will be deducted for debts and cash as per the proceedings of the deal.
What Sprng Energy Brings
Sprng energy is only going to add a renewable portfolio of 5 GWp to ABRen, which has 9.3 GWp in its register. Out of the total, 3.3 GWp is sustainable while 1.7 GWp is still under construction. Most importantly, both companies wouldn’t overlap but would complement each other.
The Strategic Vision
According to the Group Chairman, Kumar Mangalam Birla, the acquisition is an important event in the company’s development and indicates that the combined platform will exceed 20 GWp. Director Aryaman Vikram Birla added that the firm has nearly finished achieving the goal of 10 GWp ahead of schedule. In the next phase of growth of the company, the emphasis will be on the quality and implementation of projects rather than just the metrics of growth.
