As Panchabuta had earlier in the week published in twitter, according to reports in the media, General Atlantic PE is to pick up minority stake in Chennai based Wind Turbine Manufacturer ReGen Powertech for $35Mn.
General Atlantic eyes stake in wind turbine co ReGen
Private equity giant General Atlantic Partners is holding discussions to invest over Rs 150 crore, or at least $35 million, for a minority stake in wind turbine maker ReGen Powertech. The marque investor may subscribe to fresh shares in the company besides buying a part of the stake held by Everstone Capital, said two sources familiar with the process.
Nuziveedu Seeds Group, India’s largest seed company, and Everstone Capital are majority shareholders in ReGen. The promoter management led by Madhusudhan Khemka, an industry veteran in the wind energy space, also holds shares in the firm. The Chennai-based ReGen’s revenue is estimated at around Rs 500 crore but the number could not be confirmed independently. ReGen has manufacturing plant at Tada in Andhra Pradesh, which is being expanded. The domestic wind turbine maker has technical licensing agreement with Vensys AG, a global leader in wind energy space.
“General Atlantic has been holding talks for a while, but it still has not reached agreement stage,” said a banking source who did not wish to be named as talks were private. In 2010, General Atlantic was part of a private equity consortium that invested $425 million into renewable energy firm Asian Genco that is developing power projects in Asian markets including India.
ReGen Powertech joint MD R Sundaresh said we would prefer not to comment on the fund raising process. Ernst & Young is advising ReGen Powertech on the deal. A spokesperson for General Atlantic declined to comment citing the company policy.
General Atlantic may hold around 20% stake in the company, if the deal is clinched.
It is unclear, how the author considers Vensys AG to be a global leader in wind energy space though it definitely is an important player in the technology of wind turbines with direct drive and permanent magnet generator in the megawatt class.
Further, as readers might be aware, Suzlon and Gamesa are based on the gearbox technology and Enercon has a similar technology as ReGen. WinWind has a single plate gear mechanism.
According to sources, ReGen has gone a lot of efforts in fine tuning this WTG to the Indian conditions and has been pretty successful in the same. Industryexperts Panchabuta spoke to, tell us that there have been generator heating problems that arise because of Indian conditions. There have been modifications that have been made and tested to recitfy the same, but it is unclear if this has been fully addressed.
Also, according to industry experts, the tower vibrations are slightly higher than that for other comparable machines of similar capacity rating, though there is absolutely no problem with safety. This could be because of dampner provisions not being adequate. Hopefully General Atlantic PE has done some good technical due diligence and is aware of some of these possible technical issues. Another possible drawback that a number of late entrants in India face, is the non-availability of high quality Class II wind sites for their capacity installations and only established players like Suzlon and Vestas have large wind farms already accquired and micro sited and ready to be commissioned.
In all this might be a great move for ReGen Powertech as the Indian wind industry is hyper competitive and there are well established players like Suzlon and Vestas and Enercon and Gamesa have been rather aggressive in their expansion plans and they might well need this funding for strengthing the team in this ultra competitive market.