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Morgan Stanley to invest Rs 12 billion in wind energy company Continuum for majority stake

According to reports,  Morgan Stanley Infrastructure Partners, an arm of the US investment bank, has agreed to pay Rs 1,200 crore to buy a majority stake in a wind energy firm, highlighting the increasing interest of US private equity firms in Indian renewable assets.

Singapore-based Continuum Wind Energy, promoted by  IIM-Ahmedabad classmates Arvind Bansal and Vikash Saraf of Essar Group, runs wind energy farms in India and will issue preference shares to Morgan Stanley to be converted into equity at a later date, a banker close to the transaction said. The purchase will be equivalent to more than 50% stake in the energy firm.

Mumbai-based o3Capital advised on the transaction. Bansal and  Essar Group director Saraf founded Continuum in 2010 along with banker Gautam Chopra and former Wipro and Asian Pulp and Paper executives Sukant Gupta and  Ashish Swarup.

While Bansal, Saraf, Chopra and Gupta are part of the energy firm’s top management, Saraf, the head of M&As in Essar Group, plays a non-executive role. The company started the wind power business by acquiring Kutch-based wind farm assets of European power generation major Vestas.  Continuum Wind Energy will use the money to expand its business.

The company, which operates 36 mw in Kutch and Sangli in Gujarat, has signed agreements to develop an additional 175 mw at Satara in Maharashtra. The deal comes just a month after Saraf was granted bail by a Delhi court in the 2G case, along with Essar and Loop Telecom promoters  Ravi Ruia, Anshuman Ruia, IP Khaitan and Kiran Khaitan. The trial against all the executives, accused of conspiracy to cheat the government, is set to begin on July 26. This is also Morgan Stanley’s fourth investment in the power sector after Asian Genco.

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