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Hot moves: Reliance New Energy announces ₹8,600 cr worth buys

Reliance New Energy Solar Ltd, a wholly-owned unit of Mukesh Ambani-led Reliance Industries Ltd, announced two acquisitions for nearly ₹8,600 crore on Sunday as part of its ₹75,000-crore green energy transition plan.

The company has acquired 100 per cent stake in Norway-based solar cell, panel and polysilicon maker REC Solar Holdings AS for an enterprise value of $771 million (₹5,792 crore).

It also announced plans to buy a 40 per cent stake in Shapoorji Pallonji-backed Sterling and Wilson Solar Ltd (SWSL) for ₹2,845 crore.

In August, Reliance New Energy, along with strategic investors Paulson & Co Inc and Bill Gates, and a few other investors, had announced an investment of $144 million in Ambri Inc, an energy storage company based in Massachusetts, US.

These acquisitions are part of Mukesh Ambani’s plan to pivot from the traditional fossil fuel-based business to green energy.

New energy vision

“Reliance is now ready to set up a global scale integrated photovoltaic Gigafactory and make India a manufacturing hub for lowest cost and highest efficiency solar panels. We will continue to invest, build and collaborate with global players to achieve the highest reliability, efficiency and economies to deliver high-quality, reliable power at affordable prices to our customers both in India and markets worldwide,” Mukesh Ambani, Chairman, Reliance Industries, said on Sunday.

Norway-headquartered REC Solar will be a key part of Reliance’s new energy vision, providing it with a global and significant operating and technology platform, the company said in a statement.

“The acquisition is in line with our strategy of investing in new and advanced technologies and operating capabilities aimed at achieving Reliance’s goal of enabling 100 GW clean and green energy before the end of this decade,” Ambani added.

According to a press statement, REC’s range of solar modules are considered among industry leaders in efficiency, reliability and long guaranteed life, thanks to the heterojunction (HJT) technology.

The 25-year-old company, owned by Beijing-based speciality chemicals and materials company China National Bluestar (Group) Co Ltd (Bluestar), has three manufacturing facilities – two in Norway for making solar grade polysilicon and one in Singapore making photovoltaic (PV) cells and modules. REC’s more than 1,300 employees will be absorbed by Reliance.

REC has started expanding operations by setting up a 2-3 GW cells and module capacity in Singapore, a new 2 GW cells and module unit in France and another 1 GW modules plant in the US. Reliance plans to use the HJT technology in its fully integrated Gigafactory at Dhirubhai Ambani Green Energy Giga Complex in Jamnagar. It will subsequently replicate such complexes around the world.

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

Contours of the deal

The deal with Shapoorji Pallonji and Company Private Ltd (SPCPL) involves a preferential allotment of 2.93 crore equity shares, equivalent to 15.46 per cent post preferential share capital, at a price of ₹375 a share for ₹1,100 crore. Then it will buy 1.84 crore equity shares from SPCPL, equivalent to 9.70 per cent post preferential share capital at ₹375 a share.

This will be followed by an open offer to the public shareholders of SWSL to acquire up to 4.91 crore equity shares of SWSL, representing 25.9 per cent in accordance with SEBI Takeover Regulations.

Reliance New Energy Solar will hold 40 per cent of the equity capital of SWSL, consequent to acquisition in the open offer, follow-on acquisition of shares from SPCPL and the other promoter Khurshed Daruvala, and sell down, if required.

Reliance will have the right to nominate two members on the Board of the company, and the current promoter and promoter group shall have a right to nominate two individuals to the Board. Sterling & Wilson Solar’s shares closed at ₹434 on Friday.

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