SoftBank Seeking for selling its Stake in Indian Renewable Energy Venture

SoftBank Group Corp. (SoftBank) held a talk with several investors in a search to sell its share in Indian Renewable Energy Venture. The Japanese conglomerate group, SoftBank has been facing a financial crisis since the bailout issue of its subsidiary, WeWork that happened in 2019. The recent decision for liquidation was a part of SoftBank’s attempt to recover its financial crunching.

Indian Renewable Energy Project

SoftBank had teamed up with India’s Bharti Enterprises Pvt. and Foxconn Technology Group in the share ratio of 70:10:20 to install solar plants in the state of Rajasthan in the Bhadla solar park, India. The project for developing renewable power plant was part of Indian Prime Minister Narendra Modi’s policy for clean energy initiative and making the energy more affordable to the people.

After winning the contract in 2015, these companies had started a joint venture under the name, SBG Cleantech Ltd. to produce clean energy in India. Under the project, the joint venture would need to invest $20 billion to produce 20 gigawatts (GW) renewable energy in the country over 10 years. It was considered the World’s cheapest solar power project as the contract was made on the payment of 3.8 cents per unit for the project.

Modi government earlier announced its ambitious plan to produce 175 GW of renewable capacity by 2022 to meet the fast-growing country’s electricity needs and to curb pollution. India, the world’s third-largest carbon emitter, had its target to increase its solar power capacity by five times by 2022.

SoftBank Selling its Majority Shares

 As reported by The Economic Times on Thursday, January 9, 2020, “SoftBank is in talks to sell a majority stake in its renewable energy joint venture in India as it looks to raise cash after facing setbacks to its global investments.” The report mentioned that the Japanese investment group was looking for several investors from the Far East and Gulf regions, as well as some Silicon Valley technology companies. As per the report, “At present, the group is looking at a partner (Joint venture) that can provide equity commitments of $1.5 billion to $2 billion to execute and complete a pipeline of 7 gigawatts of renewable projects around the world.”

SoftBank is under the financial constraint after the group financed about $10 billion to bail out one of its best-known portfolio firms, WeWork last year. The bailout event of WeWork was considered a grave mistake for SoftBank’s founder, Masayoshi Son’s strategy which had poured billions of dollars into that cash burning startup. The Economic Times reported that SoftBank even considered selling its majority stake around 70% of its shares in the joint venture project in India.

I’m Roshan, a journalist, blogger and music lover. I like covering global news related to finance, business, and technology. Focusing on the collection of true and reliable information, I rely on working by conducting interviews with business leaders and talking to the inside sources of companies.

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