IJ Global: There is a New International Player in Town

Commercial/ 12 January 2021

The identities of additional financial and legal advisers on The Blackstone Group’s sale of a 50% stake in Onyx Renewable Partners and a 175MW portfolio of commercial and industrial solar assets to SDCL Energy Efficiency Income Trust (SEEIT) have been uncovered.

The $150 million deal, struck just before Christmas, was the fruit of an auction process run for Blackstone by BNP Paribas, as previously reported.  SEEIT, which is a London-listed vehicle managed by Sustainable Development Capital, was advised by Macquarie Capital as buy-side financial adviser.

The leqal advisers were:

  • Wilson Sonsini – to SDC
  • Milbank – to Blackstone

Onyx’s development pipeline is expected to exceed 500 MW over the next five years.

SEEIT plans to fund the purchase with existing cash reserves and debt facilities. Onyx’s roughly $37 million project debt pile will remain in place. Blackstone’s aim with the auction was to find a co-investor with a lower cost of capital to accelerate the deployment of Onyx’s pipeline in the US. SEEIT fit the bill with its roughly 5% dividend yield. Other bidders had included global strategic investors and infrastructure funds focused on renewable energy.

Launched in late June 2020, the process took the form of a traditional two-stage auction. Indicative bids were due in August and final bids in October. Negotiations took place for about a month before the deal was struck.  At first, Blackstone was seeking a 50% equity partner for the platform, but agreed to relinquish 100% of the 175MW late-stage C&I portfolio as part of the deal reached with SDC. The late-stage C&I assets are split into four portfolios that are due to be online in the next year and a half, according to a source close to the process. They are made up of 200 individual projects across 18 US states. About 27% of the portfolio’s capacity is operational or near operational. The relationship between Blackstone and SDC will allow the buyer to take advantage of Blackstone’s real estate portfolio and contacts as well as the firm’s relationships with lenders, says the source.

“This is SDCL’s first platform renewables investment in the US,” he notes. “There is a new international player in town.”

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