Ontario pension fund to purchase 30% in Mahindra’s renewable arm

Canada-based Ontario Teachers’ Pension Plan Board (OTPP) will purchase a 30 per cent stake in Mahindra Group’s renewable power platform Mahindra Susten for Rs 711 crore. The events have signed binding agreements pursuant to which Ontario Teachers’ will purchase the Mahindra Susten stake at an fairness worth of Rs 2,371 crore.

According to regulatory filings, Mahindra Susten and OTPP’s arm 2452991 Ontario Ltd (2OL) have signed share buy settlement and shareholders’ settlement beneath the strategic partnership. Mahindra Susten contains renewable engineering, procurement and building companies with capability constructed of over 4 GWp and an impartial energy producer enterprise with about 1.54 GWp of operational photo voltaic vegetation. OTPP is a world investor with web property of C$242.5 billion.

The corporations may even arrange an infrastructure funding belief (InvIT), together with renewable energy property seeded by Mahindra Susten with operational capacities of about 1.54 GWp, by FY24, Mahindra Group mentioned in a regulatory replace.

“This transaction will enable Mahindra Susten to build a strong renewable energy business focused on solar energy, hybrid energy, integrated energy storage and round-the-clock green energy plants,” it added.

Consequent to the stake sale, Mahindra Susten would stop to be a wholly-owned subsidiary of Mahindra Holdings. However, with the latter holding greater than 50 per cent of fairness share capital, the platform would proceed to be a subsidiary.

As a part of the deal, shareholder loans of Rs 575 crore superior by Mahindra Group to the platform would even be repaid. After the deal, Mahindra Group will obtain about Rs 1,300 crore (sale of 30 per cent stake and reimbursement of loans). It will deploy Rs 3,050 crore (Rs 1,300 crore from the stake sale and a further Rs 1,750 crore) into the enterprise and InvIT over the subsequent seven years. On its half, OTPP will infuse a further quantity of as much as Rs 3,550 crore throughout the identical interval.

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Mahindra may even promote a further 9.99 per cent stake in Mahindra Susten to any investor, or 2OL, by May 31, 2023, based mostly on mutually agreed issues, the assertion added.

“The partnership with Ontario Teachers’ will enable the Mahindra Group to unlock value in the renewable energy sector with continued joint investments towards accelerated growth. Mahindra Group aims to be Planet Positive by 2040 and the continued inflow of patient, long-term capital in our climate positive businesses is validation of our commitment to be a global Environmental, Social and Governance leader,” mentioned Puneet Renjhen, member of group government board and government vice chairman—partnerships & alliances at Mahindra Group.  FE