SoftBank may retain nearly 10% stake, board representation in SB Energy deal

Japan’s SoftBank Group Corp. may retain around 10% stake and board representation in SB Energy Holdings after selling its controlling stake to Canada Pension Plan Investment Board (CPPIB), two people aware of the development said.

SoftBank currently owns 80% in SB Energy, which has a 7.7 gigawatts (GW) solar power portfolio in India. The rest 20% stake is held by Bharti Enterprises Ltd.

The joint venture agreement for the deal, one of the largest green energy transactions in India, is expected to be signed shortly. Once the sale is completed, CPPIB will become the majority owner of SB Energy. Bank of America (BofA) and Barclays are managing the sale process.

CPPIB’s earlier plan was to acquire SoftBank’s entire 80% stake for an estimated $525 million. SoftBank has invested more than $800 million in the business in the past five years. The stake sale efforts follow SB Energy dropping its plan in July last year to raise $600 million through a dollar bond.

Spokespersons for CPPIB, SoftBank Investment Advisers, Bharti Enterprises, Barclays Bank India, and Bank of America declined to comment.

“The deal is expected to be completed by mid-April. SoftBank will retain a stake and will be an active participant in the company,” said the first person cited above, who did not want to be named.

“This stake is being retained to serve as security against the performance guarantee given,” said the second person mentioned above.

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