Reliance acquires the REC group, a 40% stake in the SP group’s solar unit

MUMBAI / NEW DELHI : Reliance Industries Ltd announced on Sunday a series of clean energy deals, including the acquisition of REC Solar Holdings AS (REC group) and Sterling & Wilson Solar Ltd, underlining billionaire Mukesh Ambani’s ambitions to rapidly develop his renewable energy portfolio.

RIL unit Reliance New Energy Solar said it acquired the REC group from China National Bluestar (Group) Co. Ltd for an enterprise value of $ 771 million.

Later today, Reliance announced that it had agreed to purchase a 40% stake in Sterling & Wilson Solar Ltd, a Shapoorji Pallonji group company (SP group), for approximately ??2,845 crores to ??375 per share. This is a 14% discount on the ??434 per price that Sterling & Wilson Solar last negotiated on Friday.

“This (transaction) will allow us to deliver our complete end-to-end ecosystem leading to profitable green energy for Indian consumers,” Reliance President Ambani said in a statement.

Acquisitions follow quickly after Ambani unveils RIL’s ??75,000 crore boost in clean energy over three years in June. RIL plans to spend ??60,000 crore on four so-called giga factories. One of the four factories will manufacture photovoltaic (PV) solar modules.

Mint first reported on July 8 that RIL was looking to buy REC Group.

“REC was the first to introduce half-cut passivated emitter and rear cell technology, which is adopted by all major manufacturers today, while REC has moved to its next-generation heterojunction technology,” RIL said in a separate statement, adding that RIL plans to use this cutting-edge technology at its fully integrated and fully integrated silicon metal photovoltaic panel manufacturing plant at the Giga Dhirubhai Ambani Green Energy complex, in Jamnagar, initially starting with a capacity of 4 GW per year and rising to 10 GW per year.

In Sterling & Wilson Solar, Reliance New Energy plans to purchase a 15.56% stake through a preferential grant of 29.3 million shares; 18.4 million shares, or 9.7% of the outstanding shares, of Shapoorji Pallonji and Co.; and 49.1 million shares, or the equivalent of a 25.9% stake, as part of a takeover bid under national takeover regulations.

“Reliance New Energy will own 40% of the share capital of Sterling & Wilson, following the acquisition under the public tender offer, the subsequent acquisition of shares of Shapoorji Pallonji and Co. and of Khurshed Daruvala, and will sell where appropriate, ”RIL said in a statement.

RIL, which generates more than half of its revenue from refining and chemicals, is moving towards clean energy with plans to build the Dhirubhai Ambani Green Energy Giga complex on 5,000 acres in Jamnagar, as announced by Ambani at the annual meeting of shareholders of RIL. In addition to an integrated giga plant for photovoltaic solar modules, RIL also plans to set up giga plants for the electrolyzer, fuel cell and energy storage, respectively.

As part of its green energy hub, RIL also plans to help build 100 GW of solar power by 2030.

“The acquisition of REC will help Reliance with a ready global platform and the opportunity to grow and expand into key green energy markets globally, including Europe, the United States and in Australia, ”said RIL.

Sterling & Wilson Solar has a team of 3,000 people and a presence in 24 countries. It provides a range of turnkey solar power solutions, including design, procurement, construction, project management, and operations and management. Khurshed Daruvala will continue to be the chairman and lead Sterling & Wilson’s next phase of growth, the company said.

For the Shapoorji Pallonji Group, the transaction comes after the sale of its flagship sustainable consumer product Eureka Forbes Ltd last month for ??4,400 crores.

It will help the group to reduce their debt by ??20,000 crores, of which ??10,900 crore is subject to a one-time restructuring plan under the Reserve Bank of India’s Covid-19 relief framework regulation.

The group is also considering selling a stake in Afcons Infrastructure.

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