Reliance Buys REC Solar Holdings for $771 Million, Acquires 40% Stake in Sterling & Wilson Solar
Moneylife Digital Team 11 October 2021
Reliance Industries Ltd (RIL), through its unit Reliance New Energy Solar Ltd (RNESL), is rapidly expanding its footprints through acquisitions and stake buys. Reliance New Energy bought REC Solar Holdings AS (REC Group) from China National Bluestar (Group) Co Ltd for an enterprise value of US$771 million. At the same time, the RIL group company signed definitive agreement to 40% stake in Sterling & Wilson Solar Ltd (SWSL) from Shapoorji Pallonji and Company Private Ltd (SPCPL), Khurshed Daruvala and SWSL at Rs375 per share.
REC is headquartered in Norway and has its operational headquarters in Singapore and regional hubs in North America, Europe, Australia, and Asia-Pacific. REC's Alpha and Alpha Pure range of solar modules is recognised among industry leaders in efficiency, reliability and long guaranteed life. REC has over 600 utility and design patents, of which 446 are granted, and the balance are under evaluation.
Mukesh Ambani, chairman of RIL, says, "I am immensely pleased with our acquisition of REC because it will help Reliance tap the unlimited and year-long power of Soorya Dev, the Sun God, that India is fortunate to be blessed with. It is in line with our strategy of investing in new and advanced technologies and operating capabilities to achieve Reliance's goal of enabling 100GW clean and green energy before the end of this decade.
"Reliance will strongly support for REC's planned expansions including 2-3GW cells and module capacity in Singapore, brand new 2GW Cells and module unit in France and another 1GW modules plant in the US.
"In India, the company plans to use industry-leading technology of REC in their fully integrated, metallic silicon to PV Panel manufacturing Giga factory at Dhirubhai Ambani Green Energy Giga Complex at Jamnagar, initially starting with 4GW per annum capacity and eventually growing to 10GW per annum.
"REC is a brand globally known for pioneering innovations. It was the first to introduce half-cut passivated emitter and rear cell (PERC) technology, which all significant manufacturers adopt today, while REC has moved on to its next-generation HJT technology. Its low carbon footprint distinguishes REC's Norway operation in the manufacture of polysilicon.
"Reliance New Energy Solar's deal with the Shapoorji Pallonji group company involve preferential allotment of 2.93 crore shares that are equivalent to 15.46% post preferential share capital, at Rs375 per share. The transaction will also include the acquisition of 1.84 crore equity shares by RNESL from SPCPL, which are equivalent to 9.70% post preferential share capital at Rs375 per share.
"RNESL will hold 40% stake in SWSL, consequent to acquisition in the open offer, follow-on acquisition of shares from SPCPL and Khurshed Daruvala, and sell down, if any required.
"With 11-plus GW of solar turnkey projects executed globally and over five decades of engineering experience, SWSL is a leading and highly reputed international engineering, procurement and construction (EPC) and operations and maintenance (O&M) service provider in the renewables sector."
Commenting on the share purchase, Mr Ambani, the chief of RIL says, "SWSL, with its engineering talent, deep domain knowledge, global presence, and experience of executing some of the most complex projects globally, will become an important part of our solar value chain. This will enable us to deliver our comprehensive, end-to-end ecosystem leading to cost-efficient green energy for Indian consumers."
"Through the decades, spanning three generations, the Shapoorji Pallonji group has helped Sterling and Wilson become a global leader in providing turnkey solutions in the energy value chain," says Shapoor Mistry, chairman of Shapoorji Pallonji & Co Pvt Ltd, adding, "SWSL is now well-poised to make a valuable contribution, as the world transitions to a low-carbon economy. I believe this partnership is beneficial to all stakeholders and will greatly contribute to making India a leading green energy powerhouse."
Khurshed Daruvala will continue to be chairman of the Board and lead the next growth phase for SWSL. He says, "Reliance, with its integrated new energy vision, and a commitment to put India on the global green energy map, provides us with a great opportunity further to establish SWSL as the leading EPC solutions provider globally. I am sure this partnership will give SWSL new energy and excitement, and we look forward to becoming part of creating history."
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