Mumbai | New Delhi: Anglo-Dutch oil firm Shell Plc’s plan to sell its Indian renewable energy platform Sprng Energy has hit a roadblock due to tepid responses, said multiple people aware of the matter. Shell’s discussions with various strategic investors took a backseat due to valuation mismatches, they said.
Shell was in discussion with Mumbai-based Sekura Energy, the Edelweiss Alternatives-owned energy platform, to sell a 300-MW portfolio at a ₹1,200 crore enterprise value, ET reported in January. The talks didn’t materialise due to a valuation mismatch and the proposed deal got called off.
There was a gap of about 15-20 per cent in the offer given by investors for Sprng Energy assets, causing Shell to hold its plans for the time being, said the people. Shell had acquired Sprng Energy from the UK-based private equity investor Actis in August 2022 at an enterprise value of $1.55 billion.
ET reported in December that Shell was engaged in discussions with ONGC to sell its 125 MW operational solar energy asset in Rajasthan. The exclusive talks had started after the state-run energy explorer became the highest bidder for the asset. Negotiations, however, slowed in recent months over certain issues, which a source familiar with the matter said could be a deal-breaker.
The Sprng Energy deal size is also small and therefore didn’t get much attention of the ONGC management, which was occupied with larger projects like acquiring Ayana Renewable Power and PTC Energy, added the source.
However, another source said both parties are still talking and may sort out the outstanding issues and close the deal shortly. ONGC, which aims to have a renewable energy portfolio of 10 GW by 2030, is currently engaged in setting up 1 GW of renewable energy projects organically.
Spokespeople for Shell, Sekura and ONGC declined to comment.
Sprng Energy is a wholly owned entity of Mauritius-based Solenergi Power, which is in turn 100 per cent owned by Shell Overseas Investment BV. It has operational solar and wind energy assets of 2.3 GW, with a pipeline of 5 GW assets.
Though Shell had hired HSBC to sell a portfolio of 1 GW at one go, it changed strategy later and decided to monetise assets separately. It is not certain whether Shell will continue its sale process or opt for listing Sprng Energy in India.
According to a CARE Ratings report, more than 65 per cent of Sprng Energy’s operational capacity is tied up through long-term power purchase agreements (PPAs) where the purchaser has a strong credit profile.
