MUMBAI: Foreign investors led by Goldman Sachs will sell a chunk of their stake via an IPO in ReNew Power (RNPL), a renewable energy company founded in 2011 by Sumant Sinha, son of former finance minister and senior BJP leader Yashwant Sinha.
This comes even as RNPL, in a recently filed draft red hearing prospectus (DRHP) with SEBI, has disclosed that the company and its subsidiaries could be facing default risk.
Foreign investors will offload nearly 25 per cent stake or over nine crore shares in RNPL IPO, prospectus shows. RNPL along with its subsidiaries has a total outstanding of over ₹26,000 crore, of which around ₹14,000 crore is via term loan, buyers’ credit and letter of credit.
RNPL’s DRHP states that “aggregate amount outstanding, including where cross defaults are triggered, was ₹2,467 crore as on April 2, 2018.” The company added that “an event of default currently exists” with regard to its subsidiary ReNew Mega, of which an aggregate amount of ₹621.8 crore was outstanding as of April 2, 2018.
But, “as on date of this DRHP filing, the lender has not exercised the rights available to it under the terms of its financing agreements, which include right to cancel sanctioned amount with immediate effect and declare loan amount together with accrued with interest immediately outstanding and payable,” says the DRHP. RNPL has 111 subsidiaries.
An e-mail query sent to RNPL by BusinessLine regarding its debt woes and how it plans to address them remained unanswered. A source close to the company, who refused to be named in the story, said there was no case of financial default that RNPL faced. In fact, the default with one lender, which had triggered cross defaults with others was ‘technical’ as it related to non-filing of certain documents.
“There is no default. Even the technical default has been resolved since the initial prospectus was filed. RNPL’s DRHP will be revised with updated information in the final IPO prospectus,” the source said, adding that cross defaults also stands abated.
Sinha does not categorise himself as the promoter of RNPL and terminated certain agreements he had with large shareholders ahead of DRHP filing. RNPL calls itself a professionally managed company, which does not have any identifiable promoter. As per SEBI regulations, promoter category shares are locked in for three years and cannot be sold in the open market. But the norms may not be applicable to RNPL since none of the shareholders are categorised as promoters, experts say.
After he founded the company seven years ago, Sinha sold majority of his stake that was eventually picked up by foreign institutions and private equity funds including Goldman Sachs, JERA, Japan’s laregst utility company, Abu Dabi Investment Authority, Canada Pension Investment Board, Asian Development Bank, Global Environment Fund that invested ₹6,696 core in various tranches, reportedly. Wisemore Advisory, which owns 4.58 per cent stake in RNPL, is owned by Sinha along with his wife Vaishali Sinha. Both of them started out as investment bankers with foreign institutions.