Canadian investment firm Brookfield has acquired a 51% share in CleanMax Enviro (CleanMax Solar), which provides renewable energy to commercial and industrial organizations.
According to the sources, the company’s equity value is between 3,500 and 4,000 crores. The investment will primarily consist of a secondary sale of shares by current shareholders, with a limited amount of original capital infusion into the company.
This is Brookfield’s second renewable deal in as many months, following its $1 billion investment in serial Avaada Ventures, led by serial entrepreneur Vineet Mittal.
Brookfield had begun exclusive talks with CleanMax for a deal that would see it become the company’s largest shareholder on March 20.
The remaining 49% share will be held mostly by US-based investor Augment Infrastructure and CleanMax founder Kuldeep Jain. Brookfield is investing about 2,500 crores in the transaction overall, including the original injection and secondary equity purchase.
“The agreement was recently signed, and a formal announcement is expected soon.” Brookfield will now have a controlling stake in the company, which is India’s largest C&I (commercial and industrial) player. CleanMax has an operational capacity of over 1,600 MW, including around 350 MW of wind power. CleanMax has also expanded its operations into emerging countries, with a presence in the United Arab Emirates, Thailand, and Bahrain,” according to one of the sources.
With this transaction, Brookfield will have over 9 GW of diverse renewable energy assets in varying phases of operation and development across seven distinct Indian states, the source stated.
Kuldeep Jain started CleanMax in 2011. Leading technological businesses such as NTT, Cisco, Facebook, and Singapore Telemedia are among its clients, as are big industrial clients such as Ultratech, UPL, Tata Motors, Welspun, and Sansera. Brookfield declined to comment on the transaction, while CleanMax founder Kuldeep Jain did not respond to emails and text messages requesting comment.
Brookfield has already made a $400 million investment in Avaada. Brookfield funds will assist Avaada in establishing its solar cell/module manufacturing, green ammonia, and solar power businesses.
Bank of America is the trading advisor. Prior to the Brookfield acquisition, US-based Augment Infrastructure held a 53% stake in the company as of March 31, 2022, while founder Kuldeep Jain held 16.48% and UK Climate Investments held 17.58%, with a few other shareholders holding small amounts of the company’s shares, including Godrej Industries and Nadir Godrej. Augment paid Rs. 1,650 crores for a 53% interest in CleanMax in 2021.
This entailed the acquisition of Warburg Pincus and International Finance Corporation interests. According to the company’s records with the registrar of companies, CleanMax made 701.72 crores in sales in FY22, up from 621.26 crores in the previous fiscal.
In FY22, the company reported a profit of 29.85 crores, up from 25.3 crores in FY21. According to a March 28 report by credit rating service Care Ratings, CleanMax has a debt of 2,145 crores on its books, which includes NCDs at 599 crores, long-term bank facilities of around 531 crores, and short-term bank facilities worth 1,015 crores.
Apart from CleanMax, another C&I renewable energy company – Fourth Partner Energy – is also in the market for fundraising, involving the sale of its private equity shareholder TPG’s 52 percent stake.