The law firm partner that represented ReNew Power Ventures (ReNew) said his team had less than a week's time to conduct the legal review of KCT Renewable Energy prior to its successful bid for the company.
"There were multiple parties bidding for the acquisition and hence time was of prime essence to this deal, said Navin Syiem, partner at IndusLaw. "(We had) to ensure that the client had the relevant details in order to make an effective bid."
ReNew acquired a 100% stake in the KCT unit for over ₹10 billion (US$155 million) from Karm Chand Thapar (KCT) Group. KCT Renewable Energy has three fully operational wind power projects with a total capacity of 103MW in the southern state of Andhra Pradesh.
Syiem said several issues were found during the legal review, which needed to be resolved prior to closing the deal. "As one of the sellers was a private family trust of the Thapar group, the indemnity from the sellers had to be structured to ensure that the trust could meet its indemnity obligations in the event of an indemnity claim being made against it."
He added, "As part of the commercial terms of the deal, the target was required to repay existing intra-group loans. We advised on and structured the financing required by the target to repay such loans at closing. Consequently, the timelines for the financing had to be aligned with the closing of the acquisition and this required all parties involved to manage both legs of the transaction efficiently."
There was strong interest among strategic and financial investors owing to superior asset quality and favourable location. The acquisition is also indicative of increased consolidation in the renewable energy sector. "When good operational assets, with long term PPAs [power purchase agreements] at competitive tariffs come to market, there is usually a high level of interest from existing players in the market as well as new entrants looking to enter the market by acquiring a sizeable portfolio of clean energy assets," said Syiem.
Given the short time frame and interest from multiple parties, IndusLaw had to utilize resources from across practice areas – projects, regulatory, banking and finance, corporate and real estate to make the winning bid.
Syiem was supported by principal associate Divya Varghese, senior associate Rohan Ghosh and associate Kumar Gaurav. Associates Niyati Bhatt, Shruti Barua and Kumar Gaurav also assisted in conducting the limited due diligence exercise.
HSA Advocates advised KCT on all aspects of the transaction with a team led by managing partner Amitabh Sharma, partner Harvinder Singh and principal associate Devika Chadha. HSA Advocates was also involved in conducting the vendor due diligence and handling the bidding process involving around a dozen strategic and financial investors.
Originally published in Indian Business Law Journal, 21 December 2017
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