A clean energy company promoted by India’s first Formula One driver, Narain Karthikeyan, and his family is in talks to buy the wind power generation business of Inox Group for enterprise value of Rs 1,200 crore to consolidate, scale up and aid its own fundraising efforts, said people directly involved in negotiations.
Inox Renewables, an independent power producer, is a 99.98% subsidiary of listed Gujarat Fluorochemicals and has close to 300 MW of installed wind energy generation capacity across Rajasthan and Maharashtra. It has entered into long-term power purchase agreements (PPAs) with state electricity boards for the sale of wind energy.
Coimbatore-based Leap Green Energy, founded in 2006, is pursuing funding options for the deal, which is at an advanced stage of negotiations and could be announced before the close of the current financial year, the people added.
JP Morgan owns a majority stake in Leap Green Energy and has a significant management role in the company.
Leap Green is said to be in discussions with domestic and international banks to raise short-term loans to finance the deal and is also separately in discussions with UK Climate Investment LLP, a joint venture between UK Green Investment Bank and the UK’s department of business, energy and industrial strategy for an equity investment. Proceeds from the equity investment could be used to replace shortterm loans at a later stage.
Inox Wind is a hardware company specialising in blades, towers, generators and turbines. Its generation assets— all part of the accelerated depreciation scheme for wind farms —are therefore non-core.
The company promoted by the Inox Group, which owns businesses as varied as industrial gases, cinemas, windturbine manufacturing and energy generation, clocked sales of close to Rs 200 crore for the year to March 2015.
When contacted by ET, Deepak Asher, director and group head of corporate finance for Gujarat Fluorochemicals, said the company does not comment on market rumours.
Karthikeyan said he would not be able to comment on the transaction as he only focuses on marketing aspects for Leap Green. Rajeev Karthikeyan, managing director, Leap Green Energy and brother of Narain Karthikeyan, did not respond to emailed queries.
Spokespersons for JP Morgan and UK Green Investment Bank declined to comment.
“The transaction may close only by the end of this fiscal given the number of regulatory approvals required for such business transfers as agreements entered into with state electricity boards also need to be transferred to the acquirer,” said a person in the know.
Leap Green Energy has 453 MW of installed wind-generation capacity and has entered into several PPAs.