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New Delhi: ReNew Power, India's leading pure-play renewable energy producer, and RMG Acquisition Corporation II have announced the execution of a definitive agreement for a business combination that would result in ReNew becoming a publicly listed company on the NASDAQ. This is a landmark transaction as it is the first overseas listing by an Indian company through SPAC (special purposed acquisition company) route. Upon closing of the transaction, the combined company would be named ReNew Energy Global PLC and would be publicly listed under the symbol "RNW," said ReNew Power in an official statement on February 24.
"The transaction would further bolster ReNew's leading position in solar and wind energy generation for the Indian market, by funding medium-term growth opportunities, as well as paying down debt," the statement said.
"Pro forma consolidated and fully diluted enterprise value of approximately $8 billion; transaction expected to close in the second quarter of 2021, subject to customary closing conditions," said the statement.
The pro forma consolidated and fully diluted market capitalisation of the combined company would be approximately $4.4 billion at the $10 per share PIPE subscription price, assuming no RMG II shareholders exercise their redemption rights. Gross cash proceeds are estimated to be approximately $1.2 billion, comprised of $855 million from the PIPE and approximately $345 million of cash held in trust by RMG II, before any adjustments due to potential redemptions by RMG II shareholders.
Proceeds will be used to support ReNew's growth strategy, including the buildout of its contracted, utility-scale renewable power generation capacity, as well as to reduce debt. ReNew's management, and its current group of stockholders, including Goldman Sachs, the Canada Pension Plan Investment Board (CPP Investments), Abu Dhabi Investment Authority, and JERA Co Inc (JERA), among others, who together own 100 percent of ReNew today, will be rolling a majority of their equity into the new company, and are expected to represent approximately 70 percent of the effective company ownership upon transaction close.
ReNew's leadership will remain intact, with Sumant Sinha as Chairman & Chief Executive Officer of the combined company, overseeing its strategic growth initiatives and expansion.
The Board of Directors of the combined company will include representation from ReNew's existing stockholders, RMG II, and independent directors. Bob Mancini will be the appointee from RMG II to the Board. Other Board appointments will be made prior to closing.
The transaction has been approved by the ReNew board of directors and the RMG II board of directors. Completion of the proposed transaction is subject to customary closing conditions, including approval from the Competition Commission of India (CCI) and of the stockholders of RMG II, and the transaction is expected to close in the second quarter of 2021.
"The Indian renewable energy sector has grown rapidly over the last decade," said Sumant Sinha, Founder, Chairman & Chief Executive Officer of ReNew. "During this time, ReNew has been a driving force in making sure that the sources of this growth are sustainable, and also economically competitive. 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, and to help meet the Indian government's ambitious renewable energy targets. Over time, we will expand our capabilities even further, with utility-scale battery storage, and customer focused intelligent energy solutions. ReNew's vision is to enhance its position as a global leader in the clean energy space, to continue leading India's ongoing clean energy transition, and to assist in deepening electrification and decarbonisation of the Indian economy."
"When we closed our IPO in December, we were looking to partner with a company driving change on a global scale, with a proven track record, and best-in-class management," remarked Bob Mancini, Chief Executive Officer and Director of RMG II. "We found that company in ReNew, and are excited to be partnering with an incredibly talented management team, led by Sumant. Our diligence on ReNew confirmed that the company was not only the leading, but the best-positioned renewable energy firm in India. Its 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. We are proud to be a part of this incredible story."
"Since our founding partnership with Sumant Sinha, ReNew Power has exemplified our focus on supporting strong management teams and fast-growing market leaders in renewable energy," said Michael Bruun, a Managing Director in the Asset Management Division of Goldman Sachs. "We have been proud to welcome many of the world's most well-known investors to partner with us over the years. Now with this milestone event, we are pleased to see an even larger number of investors be a part of this important ESG journey."
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