Cleantech Renewable Assets is planned to purchase 51% of the issued share capital from Keppel Corp, Keppel Asia Infrastructure Fund (KAIF), and a co-investor.
Cleantech Energy Corporation will be acquired through Cloud Alpha for a consideration price of US$130 million ($177.7 million).
The earn-out payments will not exceed US$20 million and are contingent on the achievement of performance benchmarks. In a Dec 13 regulatory statement, Keppel Corp notes that the sum of these payments equals the consideration payable.
Shell, Cleantech’s current stakeholder, will own the remaining 49% of the company’s shares.
After talks that took into account the strategic merits, current market conditions, and Cleantech Renewable Assets’ development pipeline and platform value, the agreement was concluded: “on a willing-buyer and willing-seller basis.”
The shares had a book value of US$44.15 million and a net asset value of US$44.15 million as of June 30. Keppel Corp says it will pay its portion of the consideration in cash, up to US$90 million, using internal resources.
Keppel Corp has an indirect ownership in Cloud Alpha because its wholly-owned subsidiary Keppel Renewable Investments owns 60% of the company’s share capital. Cloud Alpha’s remaining 40% is held indirectly by KAIF and its co-investor.
The acquisition is not expected to have a meaningful impact on Keppel Corp’s net tangible assets per share or earnings per share in its fiscal year 2021, which ends on December 30.
The transaction is scheduled to close in 1Q2022, subject to and conditional on the satisfaction of certain usual conditions, such as regulatory and other clearances.
Cleantech is a solar energy platform based in Singapore that focuses on the commercial and industrial markets. Across the various stages of operations, construction, and development, that company has a total capacity of over 600 MegaWatts.
India, Thailand, Malaysia, Singapore, Indonesia, Cambodia, and Vietnam are among the countries where it has assets.
Cleantech has roughly 120 credit-worthy and top-tier customers, with 95% of them coming from the automotive, industrial, consumer and retail, energy and chemicals, and textile industries.
Apollo Tyres, Cargill, Coca-Cola, Shell Lubricants, Akzo Nobel, Kerry Ingredients, and Kuehne + Nagel are among its customers.
Over the following five years, it aims to reach a total generation capacity of 3 GigaWatts. This comes as the company anticipates increased demand for renewable energy as more customers set Net Zero goals.
“Keppel’s commitment to sustainability and our vision 2030 ambitions to build our renewables business are reflected in our investment in Cleantech,” says Loh Chin Hua, CEO of Keppel Corp.
“Keppel is using Cleantech’s expertise in solar energy projects and seeking chances for collaboration with other elements of the Keppel Group so that it can better meet its aim of having 7 GigaWatts of renewable energy assets by 2030,” he says.
Interestingly, Cleantech is KAIF’s first investment in the renewable energy sector.
Keppel Capital’s KAIF is managed by a private fund manager. The KAIF alliance and associated co-investment vehicles, which were launched in January 2020, have received pledges totaling roughly $1 billion from worldwide institutional investors.
Keppel Corp directors Loh Chin Hua, Till Vesting, and Veronica Eng are among the fund’s investors.
Before the announcement, Keppel Corp’s stock dropped 6 cents, or 1.15%, to $5.18.
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