ReNew Power SPAC: RMG Acquisition Corp shareholders' vote in August

Firm to list on NASDAQ at $8 billion valuation

RMG Acquisition Corp II (RMG-II), the US-based blank cheque firm that will aid the listing of ReNew Power on the NASDAQ, will on August 16 vote on a February deal for a merger of the two companies. This will bring one of India’s leading renewable companies one step closer to an overseas listing. 

RMG, in a public notice on August 2, said, “The extraordinary general meeting of RMG-II shareholders to approve the pending business combination... is scheduled to be held on August 16, 2021 at 9:00 am Eastern Time.” The notice follows a July 28 announcement by RMG, which sta­ted the definitive proxy statement relating to the previously announced business combination with ReNew Power, has been filed with the US Securities and Exchange Commission (SEC) on the same date.

The voting on August 16 would entail the approval of shareholders for the investment being done by RMG II.

ReNew Power had in February this year announced that it will list on NASDAQ through a business combination with RMG II. The pro forma consolidated and fully diluted enterprise value is expected to be close to $8 billion. “ReNew is expe­cted to receive approximately $610 million in net proceeds, enabling the company to fully fund its planned expansion through 2025. After the business combination is effected, existing ReNew shareholders will hold about 70 per cent of the combined company,” RMG II said in its filing in May.

 

The transaction includes a fully committed, upsized $855 million private inv­est­ment in public equity’ (PIPE) from investors that include BlackRock, BNP Paribas Energy Transition Fund, Chamath Palihapitiya, Sylebra Capital, TT Intern­ational Asset Management Ltd, TT Envir­onmental Solutions Fund and Zimmer Partners, as well as $345 million of gross cash held in trust by RMG, said the company. ReNew is backed by equity investors such as Goldman Sachs, Tokyo-based JERA, Abu Dhabi Investment Authority, Canada Pension Plan Investment Board, and Global Environment Fund.

ReNew Power is hopeful of tapping international funds and taking advantage of Environmental, Social and Corporate Governance (ESG) investment, which is catching pace in the global market. ReNew is looking to be fully funded for its equity requirements till the 2025 fiscal year through this listing.

The company in 2018 floated IPO to list in India but the issuance was called off. The company is now taking the “Special purpose acquisition company (SPAC)/ blank check company” route to list at a valuation of $8 billion.

Speaking with Business Standard in March, Sumant Sinha, founder-chairman and CEO, ReNew Power, said, “Global ma­r­kets are deep and the whole theme of ESG investment has picked up. Therefore, we have access to new funds and investors who otherwise would have not been able to invest in the Indian listing.”