Sumant Sinha, chief executive officer of Renew Energy Global Plc, during a Bloomberg Television interview in London, UK, on June 7, 2023.
Some of the biggest investors in ReNew Energy Global have offered to take the company private, filings to the U.S. Securities And Exchange Commission show, in a deal that values the clean power generator at $2.82 billion, according to Reuters calculations.
Major shareholders Canada Pension Plan Investment Board, UAE-based Masdar, ReNew Chairman Sumant Sinha and a unit of the Abu Dhabi Investment Authority have offered to buy shares in India's second largest clean energy generator at $7.07 each.
The consortium has collective voting rights of 64% in ReNew, which is India's second biggest renewable energy firm after Adani Green.
The offer represents an 11.5% premium to ReNew's closing price of $6.34 on Nasdaq on Dec. 10. The valuation is based on a total of 398.61 million diluted shares outstanding as of Aug. 15, according to the company's website.
Shares of ReNew closed 17.7% higher at $7.46 on the Nasdaq on Wednesday, 5.5% above the offer price.
ReNew operates 10.3 gigawatts of solar, wind, hydro and hybrid projects across India. Its stock had lost nearly 18% of its value this year before the offer was made.
In a letter to the lead independent director of ReNew's board attached to the SEC filings, the consortium said the proposal would provide the company's shareholders with "immediate liquidity not available in the public markets".
CreditSights, a unit of Fitch Group, noted ReNew's delisting from NASDAQ would lead to poorer disclosures and leave it unable to raise funds from the U.S. public equity markets.
But it said the move would lower compliance and regulatory costs for the company's ambitious expansion plans.
"It will ... introduce a new reputed UAE state-owned shareholder Masdar that could open up more funding channels in the UAE/Middle East," CreditSights said in a note, adding that ReNew's equity valuations had been weak for a prolonged period.
Masdar said in a statement the proposal "would provide capital investment to support the country's energy transition".
The offer, if approved by the board, would mean an exit for Japan's top utility JERA, which owned 11.7% of Class A shares in the company, according to ReNew's annual filing in July. It was not immediately clear if JERA still held a stake of that size in the company.
Goldman Sachs, one of ReNew's earliest investors, sold its entire stake after the energy company went public in 2021.