Greenko: Greenko founders trim Orix stake buy plan, to raise $610 million

Mumbai: Greenko Group founders, Anil Chalamalasetty and Mahesh Koll, are scaling down their planned acquisition of a stake held by Japan’s Orix Corporation, opting to raise $610 million to buy 17.3% of the renewable energy firm’s holding company, people familiar with the matter said.

Initially, they had aimed to raise $800 million for the full 20% stake held by the Tokyo investor.

The deal has been restructured to reduce leverage in the tightening credit markets scenario and is expected to be finalised later this week, the people said, requesting anonymity.

The financing could be raised at a cost of around 14% and is being syndicated by Deutsche Bank and Barclays. Investors in the two-year facility could be large funds, including Clifford Capital, BlackRock and other private credit funds.

“Greenko promoters have sent a revised deal to Orix and it should close in the next two weeks,” said a source. “The promoters decided to scale down the fundraise as the cost of borrowing has gone up from 12% to 14% between March and May due to global uncertainties.”

An Orix spokesperson said as stated on April 25, it has decided to cancel the planned sale of its stake in Greenko to AM Green. “At this time, we are unable to provide any further information beyond what has already been disclosed,” said an Orix spokesperson.Spokespersons of Greenko did not respond while Barclays and Deutsche Bank did not respond to requests for comment. The revised plan follows the collapse of an earlier share transfer agreement announced on April 25, between Orix and AM Green Power BV, a Greenko founder-owned entity, after the deal failed to meet financing-related conditions precedent. Although the competition regulator cleared the transaction on March 11, funding agreements with lenders could not be finalised by the extended April 15 deadline, forcing Orix to terminate the agreement.

In a statement dated April 25, Orix confirmed it had scrapped the deal originally announced in January, citing failure to meet key conditions.

In January, Orix had announced plans to reinvest through a convertible note issued by AM Green Luxembourg, the parent of AM Green Power. That investment, too, is on hold.

Greenko’s founders had initially engaged with private credit funds, including Temasekbacked Clifford Capital and BlackRock to raise $800 million for the full 20% stake. While that plan did not materialise, several of the same investors are expected to join the latest round. Japan’s Orix had invested in Greenko in 2021 but now wants to sell its stake and reinvest in a new green energy venture called AM Green (AMG), created by Greenko’s founders.

AMG focuses on future energy like green hydrogen and ammonia, with big plans for clean fuel exports. This deal helps Orix shift focus to next-gen energy while Greenko’s founders buy back the stake with help from investors. This move fits Orix’s global plan to grow in clean energy and support the shift to decarbonisation