The Mahindra Group and Ontario Teachers' has announced forming a strategic partnership under which they will invest around Rs 45.50 billion to grow future portfolios of Mahindra Susten Private Ltd (MSPL), a renewable energy platform of the former.
"Mahindra Group and Ontario Teachers' have agreed to invest an amount of around Rs 45.50 billion to grow MSPL's future portfolio," a regulatory filing said.
The filing showed that under MSPL, a subsidiary of Mahindra Holdings Ltd (MHL) and 2452991 Ontario Ltd (2OL) have inked share purchase agreement and shareholders' agreement under the strategic partnership.
The agreements provide for selling 30 per cent equity by MHL in MSPL to 2OL for a cash consideration of Rs 7.11 billion, it showed.
Mahindra Holding Ltd (MHL), a subsidiary of Mahindra & Mahindra Ltd, will sell additional 9.99 per cent of the paid-up equity share capital of MSPL to any other investor(s) or 2OL or any of its affiliates (Ontario Teachers') by 31th May, 2023, showed a regulatory filing.
It also stated that the pacts also provide for formation of an Infrastructure Investment Trust (InvIT) with MSPL and Ontario Teachers' as Sponsors, which will own identified operational assets held in Special Purpose Vehicles (Project SPV).
Mahindra Group and Ontario Teachers' Pension Plan Board (Ontario Teachers') have formed a strategic partnership to capitalize on the growing renewables opportunity in India and contribute towards the country's decarbonization ambitions, a company statement said.
The parties have signed binding agreements pursuant to which Ontario Teachers' will acquire a 30 per cent equity stake in MSPL at an equity value of Rs 23.71 billion (USD 300 million).
The InvIT is initially proposed to comprise renewable power assets seeded by Mahindra Susten with operational capacity of around 1.54 GWp.
As part of the proposed transaction, shareholder loans of Rs 5.75 billion (USD 73 million) advanced by Mahindra Group to Mahindra Susten will be repaid.
As a result of this transaction, Mahindra Group will receive an inflow of approximately Rs 13 billion (USD 165 million), it stated.
Mahindra Group will deploy these funds, plus an incremental amount of up to Rs 17.50 billion (USD 220 million), into the business & InvIT over the next seven years, it stated.
Over the same period, Ontario Teachers' has committed to deploy an additional amount of up to Rs 35.50 billion (USD 450 million) into the business and the InvIT over the next seven years, it also said.