Goldman-backed ReNew Power to list on NASDAQ at $8 billion valuation

Topics ReNew Power | Goldman Sachs | Nasdaq

ReNew has recently ventured into newer areas such as solar manufacturing, power transmission, and power distribution.
Goldman Sachs promoted renewable power generation company ReNew Power will list on NASDAQ through a business combination with RMG Acquisition Corporation II (RMG II). The pro forma consolidated and fully diluted enterprise value is expected to be close to $8 billion.

In a public statement, ReNew announced execution of a definitive agreement with RMG II for a business combination that would result in ReNew becoming a publicly listed company on the NASDAQ.

“Total anticipated proceeds of $1.2 billion, comprised of $855 million, upsized, fully-committed private placement of common stock in ReNew Power (the “PIPE”) and $345 million of gross cash held in trust by RMG II, subject to redemptions; anticipated net primary proceeds of approximately $610 million to fund the company’s accelerated growth strategy and pay down debt,” said a statement by the company.

RMG II is special purpose acquisition company (SPAC) for effecting a merger, stock purchase or similar business combination with one or more businesses. The company is sponsored by Riverside Management Group (“RMG”) and the Management Team of James Carpenter, Robert Mancini and Philip Kassin.

This is the first ever De-SPAC transaction globally involving a renewable power generating company and first involving an India based target since 2016.

Upon closing of the transaction, the combined company would be named ReNew Energy Global PLC and would be publicly listed under the symbol ‘RNW’. ReNew said the transaction would help the company by funding medium-term growth opportunities, as well as paying down debt.

“Over the next decade, ReNew plans to maintain its track record of market share growth, and contribution to the greening of the Indian power sector. Over time, we will expand our capabilities even further, with utility-scale battery storage, and customer focused intelligent energy solutions,” said Sumant Sinha, founder chairman and CEO, ReNew Power.

ReNew has recently ventured into newer areas such as solar manufacturing, power transmission, and power distribution. It recently participated in a tender for privatisation of power distribution in Dadar & Nager Haveli, Daman & Diu. The company also plans to expand in energy storage and hydrid power projects.

Apart from Goldman Sachs, ReNew is backed by equity investors such as Tokyo based JERA, Abu Dhabi Investment Authority, Canada Pension Plan Investment Board, and Global Environment Fund. The investors who together own 100 per cent of ReNew today, will be rolling a majority of their equity into the new company, and are expected to represent approximately 70 per cent of the effective company ownership upon transaction close.

Goldman Sachs has been looking to exit from its investment for close to two years. The PIPE listing would also provide an easy exit route to the existing investors, said a senior market analyst.

“The transaction re-emphasises strong investor interest in Indian renewable energy sector with massive growth potential. The deal saw participation from some of the world’s top ESG investors and opens the door for many more SPAC transactions from India across sectors,” said Gaurav Singhal, managing director, India Investment Banking, Bank of America, which acted as sole financial advisor and Lead PIPE Placement Agent to RMG II.

ReNew’s leadership will remain intact, with Sumant Sinha as Chairman & Chief Executive Officer of the combined company. Bob Mancini will be the appointee from RMG II to the Board.

“Our diligence on ReNew confirmed the company’s commitment to measured growth through long-term partnerships with Indian central and state government agencies, scale, technological innovation, and strong financial position should enable ReNew to take advantage of the incredibly positive trends in the Indian power market over the next decade and beyond,” said Bob Mancini, Chief Executive Officer and Director of RMG II.

The upsized PIPE was anchored by marquee institutional investors including funds and accounts managed by BlackRock, BNP Paribas Energy Transition Fund, Mr. Chamath Palihapitiya, Sylebra Capital, TT International Asset Management Ltd, TT Environmental Solutions Fund and Zimmer Partners. 

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