Kolkata buys Shell’s solar business in India and Sri Lanka

November 2, 2007 (Economic Times) – Here’s another global Indian takeover story. Little known Kolkata-based company, Environ Energy-Tech Service on Thursday announced the acquisition of Netherlands-based Shell’s solar energy businesses in India and Sri Lanka for an undisclosed sum.

The Rs 35-crore, closely-held Environ Energy-Tech has routed the global acquisitions through its mint fresh Singapore-based SPV, Environ Energy Global. Company sources hinted that Environ would shift its headquarters to Singapore in the near future for managing its global business.

The actual deal details remain hazy, but financial circles close to the development are pegging the transaction in the region of $100 million (about Rs 400 crore). Environ’s director Jyoti Poddar, however, declined to confirm this.

“Environ has acquired 100% in Shell Solar India and Shell Solar Lanka from Shell Overseas Investment BV, the holding company of global oil giant Shell. We are bound by a confidentiality agreement with Shell. So, I am unable to provide any further details of the deal,” Mr Poddar told ET.

Shell’s overall revenues are in excess of $319 billion (over Rs 12.5 lakh crore). Shell Solar India and Shell Solar Lanka have a collective turnover of a modest Rs 75 crore.

Environ claims the company had to jostle with some of the top names in the global renewable energy space in the UK, Germany and US to acquire 100% of Shell Solar India and Shell Solar Lanka. Environ’s acquisitions were partly funded by a couple of European banks and internal accruals.

The three-and-a-half year old Environ was set up with a capital of Rs 10 crore. The company, however, is confident of servicing the bank loan with its future income. “There are huge opportunities in the solar energy space. The country has the potential to produce 5,000 mw of solar energy per annum. Each 1,000 mw of generation triggers business opportunity of Rs 10,000 crore,” claimed Mr Poddar.

Environ also claims it will become the largest photovoltaic panel-based solar solutions company worldwide following these dual-acquisitions. “With this, the company has acquired a business of Rs 75 crore, taking its total turnover to Rs 110 crore,” according to Mr Poddar.

Environ is slated to retain the 440-odd Shell engineers at the Indian and Sri Lankan solar energy units. Its employee strength will, accordingly, rise to 560 from the current level of 100.

While the acquisition in India would consolidate Environ’s position in the country’s renewable energy space, Mr Poddar felt the acquisition in Sri Lanka would spur the company’s efforts to expand operations to Vietnam, Indonesia, Philippines, Africa and Europe.

“We expect to achieve a turnover of Rs 150 crore by March 2008,” he said. The company also intends to take the acquisitions route to grow. “We are likely to acquire two more solar energy companies in Asia and Europe,” said Mr Poddar. The company is also in the final stages of commissioning a manufacturing unit in West Bengal.

The global oil giant Royal Dutch Shell, in turn, appears to be slowly exiting the solar energy business. It had earlier sold off its solar units in US, Germany, South Africa and Singapore to Germany’s SolarWorld AG. Shell now has solar operations only in the Philippines, China and Indonesia.