Piramal Group is reportedly planning to buy operational renewable power projects of Mytrah Energy. When acquired it will be the first set of assets in the newly launched private InvIT that is co-owned by the Piramal Group and CPPIB reports ET.
One of two sources aware of the development speaking to the publication said both the partners know about Mytrah Energy assets and they are discussion about buying the assets are on for quite some time.
According to the report Piramal in 2017 provided loans worth $277 million to Mytrah through non-convertible debentures and the amount will be due in the next few years. Mytrah had used the funds to provide exit options to existing investors such as IDFC Alternatives, AION Capital, Merrill Lynch and Goldman Sachs.
Second source speaking to the publication said Piramal does not want the Mytrah Energy debt to be a non performing asset and is thus keen on acquiring the operational assets at the earliest.
Recently Piramal Enterprises Limited signed a Memorandum of Understanding (MoU) with Canada Pension Plan Investment Board (“CPPIB), to co-sponsor a renewable energy focused Infrastructure Investment Trust (“InvIT”).
With an initial corpus of US$ 600 million, and the option to scale further, the InvIT would seek to acquire up to 1.5-2GW of stable and cash generating renewables assets on a hold-to-maturity basis, with a firm focus on diversification of both asset type as well as off-taker profile.
Ajay Piramal, Chairman, Piramal Group then said “We are pleased to partner with CPPIB on the launch of the first ever InvIT in India, focused on renewables. The foundation of this partnership is based on a shared ethos and values that leverage CPPIB’s global track record of value creation in the infrastructure space with PEL’s long term strategy and goodwill in India. We are enthusiastic about the opportunity as it is truly scalable and continue to remain committed to creating value for our shareholders.”
Both PEL and CPPIB will act as Co-Sponsors of the proposed InvIT and hold up to 75% of the units (with CPPIB committing US$360m and holding up to 60%; PEL committing US$90m and holding 15% ) and seek to raise capital from other like-minded investors for the remaining 25%.
In the interim and prior to its launch, PEL and CPPIB will jointly warehouse seed assets for the proposed InvIT.
PEL would act as the sole Investment Manager as well as Project Manager for the proposed InvIT.