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Hero Future Energies eyes renewable assets of Equis energy

According to reports, Hero Future Energies, the renewable energy arm of the Pawan Munjal led Hero Group is evaluating options for its biggest bet yet in the burgeoning clean energy segment. The company backed by IFC, the private sector investment arm of the World bank is eyeing the renewable energy portfolio of Singapore based Equis Energy, sources familar with ongoing negotiations told ET NOW on the condition of anonymity. Credit Suisse & JP Morgan have the sale mandate for the proposed transaction.

“Hero Future Energies has aggressive expansion plans and is amongst the numerous suitors keen on the assets, though no final decision has been taken as yet. The portfolio on sale covers the Asia-Pacific region and the India portfolio would expand their domestic footprint and put them in a different league. If required, they may also bid as part of a consortium, based on deal discussions. Many international power utilities & pension funds are in the race for the deal and an information memorandum will be shortly sent to all prospective bidders,” said a source on the condition of anonymity.

“The India portfolio of Equis Energy has a capacity of nearly 700 MW and has an estimate enterprise value between Rs 6000-Rs 6500 crores,” added a second source familar with the proposed transaction.

Renewable energy develepor Equis Energy plans to exit the Indian market and has put Energon and Energon Soleq on the block. Energon is focused on wind power projects with 414 mega watt (MW) of operating assets while Energon Soleq works in the solar sector and is developing projects totaling 260MW in Telangana and Karnataka.

In response to an email query from ET NOW, Equis Energy Chairman David Russell said “Equis Energy is considering a restructuring of its entire renewable energy business with longer term investors looking to support management’s growth strategy. Equis Energy believes combining its various renewable energy businesses will yield significant synergies and allow the group to continue to provide competitive, low-cost pricing and technology solutions for the long term. The process involves the restructuring of 100% of Equis Energy.”

The company added “We don’t have any comment on the identity of parties involved in the restructuring process” and confirmed that Credit Suisse and JP Morgan have been appointed to manage the process. Hero Future Energies said, “The company will like to maintain its policy of not commenting on rumours except as required by law. The company or any of its business unit is not aware of any information supporting these rumours.

Hero Future Energies is present nearly 10 states of India with high quality operating asset base of ~500 MW across wind, solar PV (grid connected) & rooftop plants. Equis Energy is headquartered in Singapore is the largest renewable energy IPP in the Asia-Pacific region and operates from 15 Asian offices. As of 30 June, 2017, it owned 97 renewable energy assets, totaling 4.4 GW across Australia, India, Indonesia, Japan, the Philippines, Taiwan and Thailand. In addition to our current portfolio of 4.4 GW, Equis Energy has a further 74 assets and 6.7 GW under development.

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