India’s leading pure-play renewable energy producer ReNew Power and RMG Acquisition Corporation II (RMG II) have agreed to merge, resulting in ReNew becoming a publicly-listed company on the Nasdaq.
Upon closing of the transaction, the combined company would be named ReNew Energy Global and would be publicly listed under the symbol RNW.
The transaction is expected to 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 pro forma consolidated and fully diluted market capitalisation of the combined company would be approximately $4.4bn at the $10 per share subscription price, assuming no RMG II shareholders exercise their redemption rights.
Gross cash proceeds are estimated to be approximately $1.2bn, comprising $855m from the PIPE and approximately $345m 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 (JERA), among others, who together own 100% of ReNew today, will be rolling a majority of their equity into the new company, and are expected to represent approximately 70% of the effective company ownership upon transaction close.
ReNew’s leadership will remain intact, with Sumant Sinha as chairman and chief executive 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 and of the stockholders of RMG II, and the transaction is expected to close in the second quarter of 2021.
Founded in 2011, ReNew is India’s leading renewable energy independent power producer (IPP), and among the top 15 largest renewable IPPs globally by capacity, with a portfolio of more than 100 operational utility-scale wind and solar energy projects spread across 9 Indian states.
The Company also owns and operates distributed solar energy projects for more than 150 commercial and industrial customers across India.
ReNew founder, chairman and chief executive Sumant Sinha said: “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 decarbonization of the Indian economy.”
RMG II chief executive officer and director Bob Mancini added: “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.
“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.”