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PE funds, promoters to exit Kiran Energy

PE funds, promoters to exit Kiran Energy


The owners of solar power producer Kiran Energy Solar Power Pvt. Ltd have decided to sell the company outright after earlier attempts to sell a majority stake failed, two people familiar with the development said.

Private equity funds own nearly 80% in the Mumbai-based company and founder Ardeshir Contractor holds 15%, while former Tata Sons executive director Alan Rosling and a few others own the rest.

“The company has been on the block for almost two years now, with three private equity investors who own around 80% stake in the company wanting to exit,” said the first of the two people cited above, both of whom declined to be identified. “But despite several rounds of talks, a deal did not happen as some of the buyers wanted complete control of the company while the other shareholders, including company founder and managing director Ardeshir Contractor, were not keen to sell their stakes.”

“But PE investors and the promoters have finally reached a consensus and the search for a buyer has resumed,” this person added.

Kiran Energy has 100 megawatts (MW) of solar power assets, including a 60MW plant in Rajasthan. The company also owns a stake in Mahindra Solar and is currently developing several photovoltaic projects in India.

Contractor, who previously headed the investment banking unit of KPMG in India, founded Kiran Energy in 2010 with investments from Rosling and a few others.

In the same year, private equity funds Argonaut Ventures, New Silk Route and Bessemer Venture Partners jointly invested $44.4 million in the company.

“There is a significant buyer interest in the company,” said the second of the two people cited earlier. “Last year, a French energy major was all set to acquire a majority stake in the company for an enterprise value of Rs1,250 crore but the deal did not materialize,” this person added.

While emails sent to Argonaut Ventures, New Silk Route and Bessemer Venture Partners remained unanswered till the time of going to press, a spokesperson for Kiran Energy declined to comment.

The renewable energy sector in India has seen a number of deals in the recent past, indicating growing investor interest. In June, Tata Power acquired the entire 1.1 gigawatt (GW) renewable energy portfolio of Welspun Energy for $1.4 billion in enterprise value.

In October, Hyderabad-based Greenko, backed by Singapore’s GIC and Abu Dhabi Investment Authority (ADIA), acquired SunEdison’s Indian assets at an enterprise value of $392 million (Rs2,607 crore).

A number of domestic and overseas funds are also investing in renewable energy platforms to acquire assets.

According to Icra Ltd, the renewable energy sector witnessed a record capacity addition of 6.9GW during fiscal 2016. Of this, solar energy contributed 44%. As on March 2016, installed renewable energy based capacity stood at 42.7GW, accounting for 14.1% of the overall installed capacity in the country, up from 10.5% at the end of March 2010.

Anand Gupta Editor - EQ Int'l Media Network


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