According to reports, Bharat Light and Power (BLP), founded by former General Electric India boss Tejpreet Singh Chopra, has raised 200 crore from private equity and venture capital funds to buy out the wind energy assets of real estate firm DLF.
The unlisted renewable energy firm raised the money through a combination of mezzanine debt and sale of stake to UTI Capital, VenturEast and Draper Fisher Jurvetson, two persons with direct knowledge of the development said. While Tejpreet Singh Chopra, who started BLP, after more than a decade he left GE India, was unavailable for comments, UTI Capital, VenturEast and Draper Fisher Jurvetson declined to comment.
The funds will be used to take over DLF’s 160-mw assets in Gujarat and Karnataka. Legal firm Amarchand Mangaldas is drafting the final legal document and the deal is likely to be announced as early as this week, one of the persons, an investment banker, who did not want to be quoted. Chopra, a management post-graduate from Cornell University, relied on the “old boys Delhi network” and finance from his investors to clinch the deal. “Some of the senior executives of DLF are from GE group. They had worked together with Tejpreet Singh. Both sides came on the discussion table through ‘old boy network’ around July last year,” said a senior executive involved in the deal. “The comfort level between the two sides are very high,” he said.
While UTI Capital bought a 16.98% stake in Bharat Light and Power for 50 crore, existing venture capital investors VenturEast and Draper Fisher Jurvetson made an additional investment of 50 crore. The two venture capital firms invested 53 crore in 2011 to buy a minority stake. Post-equity dilution, Tejpreet will hold close to 50% stake in the company.
UTI’s investment comes after a string of PE funds buying out stakes clean energy companies as India is fast emerging as a host spot for renewable sources of energy. BLP will also take over the debt amounting to 250-300 crore, taking the total valuation to 500 crore.
The company has raised 100 crore through mezzanine debt. Mezannine financing is a hybrid instrument with debt like features. But it is a step below senior debt. BLP’s move to acquire DLF’s assets stems from its desire to develop 1 gigawat of wind assets by 2016 through green-field ventures, co-development and acquisitions. Tejpreet Singh roped in senior professionals from GE, RioTinto, Mercados, Enercon, Regen and BHEL to start BLP in February 2010 after he had quit GE. The company has 22.2 mw of operating wind projects in Maharashtra.
DLF, founded by billionaire Kushal Pal Singh, has been trying to cut debt. Last month, DLF announced a deal to sell its stake in luxury hotel group Aman Resorts. Last year, it sold another hotel firm in Kolkata and also a large land parcel in Mumbai.