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In a bid to bring down debt, Shapoorji Pallonji Infrastructure Capital (SP Infra) has sold its five operational solar energy assets, with combined capacity of 317 MW, to investment firm KKR for ₹1,554 crore.
As a part of the deal, SP Infra will sell 169 MW of solar projects in Maharashtra and 148 MW of projects in Tamil Nadu. Mukundan Srinivasan, Managing Director of SP Infra, said: “This deal further demonstrates SP Infra’s continued track record of developing high-quality infrastructure assets in its chosen spaces, creating value for further growth in its businesses, and be the partner of choice for high-quality international investors like KKR.”
This is not the first time that Shapoorji has sold off a business in the solar energy segment to a private equity investor. In March last year, SP Infra sold 194 MW of operating solar portfolio to British Private Equity firm Actis.
One of the reasons for selling off solar energy assets can be traced to a slowdown in the real estate and the Indian economy, all of which resulted in a debt pileup of around ₹9,000 crore. To address the issue, Shapoorji decided to list Sterling and Wilson Solar Limited (SWSL), one of its group companies.
The IPO mopped up ₹2,850 crore for promoters Shapoorji Pallonji and Khurshed Daruvala. As part of the deal, the promoters had said they would repay the loans worth ₹2,563 crore (taken from Sterling and Wilson) within 90 days of listing. Since the listing period they have repaid ₹1,500 crore, including principle and interest.
The Shapoorji group has stated that it has put on the block its water purifier, vacuum cleaner business Eureka Forbes, in addition to selling certain infrastructure assets across roads, solar power and ports.
Analysts told BusinessLine that the two solar energy assets it sold to KKR have Power Purchase Agreements (PPAs). “This is a positive for KKR as it gives them revenue visibility and strengthening their presence here,” said an analyst.
KKR’s infra play
For KKR, this move strengthens its infrastructure play in India. Last year KKR made its first infrastructure investment. KKR invested ₹1,084 crore ($157 million) and along with Singapore sovereign wealth fund GIC, which pumped in ₹980 crore ($142 million), acquired 42 per cent in Sterlite Power backed IndiGrid, an infrastructure investment trust (InvIT).
Sanjay Nayar, CEO of KKR India, in a statement said that the deal with SP Infra was an example of how KKR can bring capital and expertise to assets to help meet the demand for infrastructure development. “Looking ahead, we are excited to explore even more renewable energy opportunities in India and overseas,” he added.
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