Ontario Teachers' to pick up 30% stake in Mahindra Susten for ₹2,371 crore

Ontario Teachers' Pension Plan Board (Ontario Teachers') has signed binding agreements with Mahindra Group to acquire 30% stake in Mahindra Susten Pvt Ltd for an equity value of ₹2,371 crore ($300 million).

A statement from Mahindra Group said that the proposed transaction also envisages the setting up of an Infrastructure Investment Trust (InvIT) in compliance with applicable regulations of the Securities and Exchange Board of India.

Avendus Capital acted as financial advisor to the Mahindra Group for the transaction.

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 ₹575 crore ($73 million) advanced by Mahindra Group to Mahindra Susten will be repaid, it said.

Ontario Teachers' to pick up 30% stake in Mahindra Susten for ₹2,371 crore

The InvIT is initially proposed to comprise renewable power assets seeded by Mahindra Susten with operational capacity of around 1.54 GWp

Ontario Teachers' Pension Plan Board (Ontario Teachers') has signed binding agreements with Mahindra Group to acquire 30% stake in Mahindra Susten Pvt Ltd for an equity value of ₹2,371 crore ($300 million).

A statement from Mahindra Group said that the proposed transaction also envisages the setting up of an Infrastructure Investment Trust (InvIT) in compliance with applicable regulations of the Securities and Exchange Board of India. Avendus Capital acted as financial advisor to the Mahindra Group for the transaction.

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 ₹575 crore ($73 million) advanced by Mahindra Group to Mahindra Susten will be repaid, it said.

"Mahindra Group and Ontario Teachers' Pension Plan Board (Ontario Teachers') announced a strategic partnership to capitalize on the growing renewables opportunity in India and contribute towards the country's decarbonization ambitions," the statement said.

It said that as a result of this transaction, Mahindra Group will receive an inflow of approximately ₹1,300 crore ($165 million).

Further, Mahindra Group and Ontario Teachers' will jointly explore the sale of an additional 9.99% stake in Mahindra Susten by May 31, 2023. Mahindra Group will deploy these funds, plus an incremental amount of up to ₹1,750 crore ($220 million), into the business and InvIT over the next seven years.

Over the same period, Ontario Teachers' has committed to deploy an additional amount of up to ₹3,550 crore ($450 million) into the business and the InvIT over the next seven years.

The statement added that the transaction will enable Mahindra Susten to build a strong renewable energy business focused on solar energy, hybrid energy, integrated energy storage & round-the-clock (RTC) green energy plants.