(Reuters) – Switzerland’s Energy Infrastructure Partners (EIP) will take a majority stake in BayWa AG’s renewable energy unit BayWa r.e. through a capital increase that will see the German agricultural group’s holding fall to 35% from 51%.
Reuters reported in July that energy investor EIP was in talks with BayWa AG to increase its stake in the renewables unit to at least 70-80% from 49% in a deal designed to ease financial pressure on BayWa and help improve the creditworthiness of the renewables arm.
EIP, in a statement on Monday, said it would invest 150 million euros of new capital in BayWa r.e. and wanted to refocus the company on its core competencies of developing and operating renewable energy projects globally.
When announcing the deal a day earlier, BayWa AG said it would relinquish 350 million euros ($366.67 million) in shareholder loans to BayWa r.e..
Matthias Taft, CEO of BayWa r.e., said that with EIP as its majority shareholder, the firm had a strong, long-term partner with extensive expertise in the energy market.
“Now, it is about unlocking efficiencies and potential, increasing profitability and positioning the company to expand its competitive edge over the long term,” he said.
The capital increase and debt financing provided will cover the additional capital and guarantee requirement of BayWa r.e. of about 435 million euros until 2028, BayWa AG said in its Sunday statement.
EIP, which has 7.5 billion euros worth of energy infrastructure under management, paid 530 million euros for its 49% stake in BayWa r.e in late 2020.
EIP said it and BayWa r.e. have engaged advisory firm Ziems und Partner to support the company’s transformation.
“We are convinced of the enormous potential of this company, its expert workforce and its unique position to drive the energy transition,” said EIP Managing Partner Roland Dörig.
($1 = 0.9546 euros)
(Reporting by Rhea Rose Abraham in Bengaluru; Additional reporting by Dave Graham; Editing by Jamie Freed and Sonali Paul, Kirsten Donovan)
