ZURICH (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 up its stake in the unit to at least 70-80% from 49% in a deal designed to ease financial pressure on BayWa and improve the creditworthiness of the renewables arm.
EIP 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, building and operating renewable energy projects globally.
EIP Managing Partner Roland Doerig told Reuters that BayWa r.e.’s Solar Trade unit would be sold off in due course because EIP does not consider it part of the core business. He declined to say when this would happen, saying there was “no pressure.”
BayWa r.e. has a development pipeline of 30 GW, and once it had focused strategically, it would have over 20 GW, he said.
Doerig said EIP would focus BayWa r.e. on North America and Europe because it was more competitive in those markets.
“Today, I believe, we’re in over 30 countries. That is too much for us. We want to focus first and build on our strengths and on the markets where we’re in the top 3,” he said.
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.
($1 = 0.9546 euros)
(Reporting by Rhea Rose Abraham in Bengaluru and Dave Graham in ZurichEditing by Jamie Freed, Sonali Paul, Kirsten Donovan and Leslie Adler)
