This is with reference to ‘Foreign funds unplug from ReNew Power via IPO’ (June 14): ReNew Power received queries from Palak Shah on July 13. But due to restrictions under SEBI regulations, we were unable to provide a detailed response.

The article states that ‘the company and its subsidiaries could be facing default risk’, and insinuates that the company is facing financial difficulties by using the term ‘debt woes’. This is incorrect and is based on incorrect interpretation of facts… The disclosure in our draft document has not been properly understood. The company has robust financials and there is absolutely no financial default.

The article further states that Sumant Sinha, Chairman and Managing Director, has terminated certain agreements with large shareholders ahead of the DRHP filing, and that he sold majority of his stake to foreign institutions and private equity funds. These assertions are also not based on facts… Only modifications have been made to our shareholding arrangements to comply with the SEBI and exchange requirements. Also, he has not sold any shares… since the setting up of the company, and has only increased his shareholding, as is reflected in the DRHP…

Kailash Vaswani

Deputy CFO

ReNew Power Limited

BusinessLine stands by the report.

Before writing the story, a detailed set of questionnaire was e-mailed to you by our reporter seeking your response on the same. He was told that you would not be able to send a written response and was, instead, briefed by Ravi Seth, CFO, ReNew Power, and Pradeep Wadhwa, Communications Manager, and was told to quote the responses to a ‘source close to the company’.

So, every effort was made by us to reach out to ReNew Power and incorporate your version in the story so as to keep it fair and balanced.

For the story, the reporter has relied upon information available in the public domain such as news reports and your DRHP filed with the SEBI.

Point 1 raised by you: The report states that the company and its subsidiaries could be facing default risk and insinuates that the company is facing financial difficulties by using the term ‘debt woes.’ This is incorrect and based on incorrect interpretation of facts.

Response: All the details were taken from the DRHP and there is no incorrect interpretation of facts. Page 26 of your DRHP clearly states the following: “As of the date of this Draft Red Herring Prospectus, none of our lenders have issued any notice of default or required us to repay any part of our borrowings as a result of such breaches… except for one lender in relation to loans availed by our Subsidiary, ReNew Mega, of which an aggregate amount of ₹6,218.00 million was outstanding as of April 2, 2018. Accordingly, an event of default currently exists under the relevant financing agreements entered into with such lender…”

Point 2: The article states that Sumant Sinha, Chairman and MD, ReNew Power, terminated certain agreements which he had with large shareholders ahead of the DRHP filing and that he sold majority of his stake to foreign institutions and private equity funds. These assertions are also not based on facts… only modifications have been made to our shareholding agreements to comply with SEBI and exchange requirements. Also, he has not sold any shares, including to foreign institutions and private equity funds…

Response: Again, the details have been taken from the DRHP. Pages 91, 157 and 200 of the DRHP clearly state the following:

“Our broadbase of equity investors include Goldman Sachs, JERA, ADIA, CPPIB, ADB (subsequently exited) and GEF SACEF India and have invested a total of ₹66,965.67 million in our company in various tranches over the years…

Pursuant to the Shareholders Agreement dated May 6, 2018 (as described below), the 2018 SHA was terminated from the date of the Shareholders Agreement… in the event the company is unable to complete the listing of the equity shares on or prior to December 31, 2018, or any other date mutually agreed between the parties or in the event the investors holding more than 50 per cent of the equity shares agree to not proceed with the offer, the 2018 SHA shall immediately and automatically stand reinstated without any action by the parties or shareholders…”

It is clear from above that if any founder of the company continues to issue shares to investors, it is clearly selling his stake by way of dilution of his holdings.

Further, as mentioned in the report, the DRHP clearly states that “pursuant to the Shareholders Agreement dated May 6, 2018 (as described below), the 2018 SHA was terminated from the date of the Shareholders Agreement.’ Further, the share capital history on Page 91 of the DRHP clearly shows the dilution of shareholding to various investors over the years since inception.

Editor

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