Home Featured Greenko Energy Holdings equity raise and acquisition are credit positive: Moody’s
Greenko Energy Holdings equity raise and acquisition are credit positive: Moody’s

Greenko Energy Holdings equity raise and acquisition are credit positive: Moody’s

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The clean energy firm will acquire Orange Renewables for a total enterprise value of $922 million, of which, $380 million is for the equity stake and the remainder is debt held by Orange Renewables. The acquisition is fully funded by equity injections from GEH shareholders.

New Delhi: The $922 million acquisition of Orange Renewables Singapore by Mauritius-based Greenko Energy Holdings (GEH) and an additional $447 million equity raise from shareholders is a major positive for the clean energy company, ratings agency Moody’s Investors Service said today.

“GEH’s credit profile will benefit from the cash-flow-generating ability of Orange Renewables assets and the continued demonstration of shareholder commitment and support. The acquisition confirms GEH’s expansion ambitions, which will entail execution risk and funding needs,” Moody’s said in a report issued today.

The clean energy firm will acquire Orange Renewables for a total enterprise value of $922 million, of which, $380 million is for the equity stake and the remainder is debt held by Orange Renewables. The acquisition is fully funded by equity injections from GEH shareholders.

The additional equity injection beyond the acquisition requirement demonstrates shareholders’ commitment to GEH, stated the Moody’s report. “The shareholder equity injection reinforces our expectation that GEH’s ultimate shareholders, GIC, the Abu Dhabi Investment Authority and Greenko Ventures (held by the founders) will provide support to the Greenko group in case of need,” the report said.

Including the latest equity injection, the shareholders have so far injected $1.4 billion into GEH over the past three years to help finance the development and construction of GEH’s renewable energy portfolio. In addition, the majority shareholder is closely involved in GEH’s strategy, risk management as well as corporate governance, Moody’s said.

Orange Renewables has 707 Megawatts of operational solar and wind assets, and an additional 200 Mw of assets under construction which are likely to be commissioned by April 2019. The purchase includes a pipeline of 500 Mw of capacity under development. Because of this acquisition, GEH’s operational capacity would increase to about 4 Gigawatt.

Source: energy.economictimes.indiatimes
Anand Gupta Editor - EQ Int'l Media Network