According to reports, Indian Energy Ltd. (IEL), an operator of wind farms backed by Lloyds Banking Group Plc (LLOY) and AXA Investment Managers, expects a formal offer from a potential buyer within weeks.
“We want to see a deal concluded in a relatively short period of time,” Chief Executive Officer Rupert J. Strachwitz, co-founder of the company and former financier at Dresdner Kleinwort’s private equity division, said in a telephone interview late yesterday. “We’re talking weeks, not months.”
The company is looking for a strategic investor to help grow the business, he said. He declined to say how much it hopes to raise. The party could offer to buy out part or all of the company, he said.
If the negotiations don’t work out, the company may sell its wind farms in India, he said. Guernsey-based Indian Energy, which is listed on London’s Alternative Investment Market, is in exclusive talks with a party whom Strachwitz declined to identify, citing a confidentiality agreement.
Potential investors in Indian Energy may be smaller private companies looking for scale in the country’s fragmented wind industry, said Adam Forsyth, a partner at London-based investment bank Matrix Group Ltd.
“A possibility is somebody looking to do a consolidation play in the Indian wind sector,” Forsyth said by telephone from Edinburgh yesterday.
Indian Energy owns and operates two wind farms totaling 41.3 megawatts in India and aims to expand its portfolio to 300 megawatts by 2013 by buying already operating wind farms or those in advanced development to avoid India’s land-permitting regulations for new projects.
It has no intention of scaling back those plans and is talking to a range of parties including financial investors, Indian and non-Indian, Strachwitz said.
“We have sufficient capital to go on for some time but we don’t believe being in limbo is creating any value for our shareholders,” Strachwitz said.
It will be interesting to see the valuations of Indian Energy given that the projects are all commissioned or being commissioned. As Panchabuta understands the company has little or no land banks and no in-house development team as is the case with most Wind IPP developers in India. Given these, valuation becomes a function primarily driven by the performance of the turbines at the wind sites and the quality and type of PPA signed (group captive etc.).