Ontario Teachers' Pension Plan to acquire 30% stake in Mahindra Susten

19 Sep 2022 , 08:07 AM

For Rs2,371 crore ($300 million), the top Canadian investment firm Ontario Teachers’ Pension Plan Board (Ontario Teachers’) will purchase a 30% share in the renewable energy platform Mahindra Susten, according to a statement from Ontario Teachers’.

Additionally, the proposed transaction includes creating an Infrastructure Investment Trust (InvIT). The initial proposal for the InvIT calls for renewable energy assets with a seed investment from Mahindra Susten and an operational capacity of approximately 1.54 GW.

Shareholder loans made by Mahindra Group to Mahindra Susten totalling Rs575 crore ($73 million) will be repaid as part of the proposed deal. According to the release, this purchase will bring in over Rs1,300 crore ($165 million) for the Mahindra Group.

By May 31, 2023, Mahindra Group and Ontario Teachers’ will work together to examine the possibility of selling a further 9.99% share in Mahindra Susten. Over the following seven years, the Mahindra Group will invest these monies, plus an additional sum of up to Rs1,750 crore ($220 million), in the company and InvIT.

Ontario Teachers’ has agreed to invest up to an additional Rs3,550 crore ($ 450 million) during the same time period in the company and the InvIT.

According to the statement, this deal will give Mahindra Susten the chance to establish a solid renewable energy business that is centred on solar energy, hybrid energy, integrated energy storage, and round-the-clock (RTC) green energy facilities.

For the transaction, Khaitan & Co. and Avendus Capital served as the Mahindra Group’s legal and financial advisors, respectively.

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