Global Infrastructure Partners has launched a formal sale of Singapore-headquartered renewables developer Vena Energy, multiple sources told Infralogic.

Indicative bids are due around now, three of the sources added.

Marketing materials, including information memoranda and a financial model, were distributed to bidders late last year, said two of the sources. The sellside is running a targeted process and has approached a select group of bidders in the latest sale attempt, two of the sources said.

Morgan Stanley, which was mandated last year, and MUFG, its joint venture partner in Japan, are aiming for an outright sale of Vena, they added.

GIP has been working on a partial exit out of Vena for some time. An outright sale is considered tough, given the difficulty in securing a buyer for a business of Vena’s size.

The auction will most likely attract the interest of funds comfortable with co-investing with GIP, like its existing partners in Equis Canada’s PSP Investments and China’s CIC Capital.

One of the options that GIP was exploring last year was asking PSP to increase its stake in Vena.

The infrastructure manager has put a value of USD 10bn on Vena Energy and has previously considered offloading a minority stake of around 30%, alongside co-control rights.

In 2018, it bought the business, then known as Equis Energy, for USD 5bn which included USD 1.3bn of debt.

A wide variety of investors, including Japan’s Orix Corp. and the Netherlands’ APG Asset Management; Shell; Qatar’s Nebras; Korea Electric Power Corporation; I Squared Capital, South Korea’s Daelim and Spain’s Gas Natural competed for Equis in 2017.

Sources doubt that as many will look this time. However, one said there could be interest from Middle Eastern investors.

Vena has grown substantially since GIP’s investment. At the time, Vena owned 1.9 GW of operating assets and a 9.1 GW development pipeline. It generated USD 206.8m of earnings before interest, taxes, depreciation and amortisation (EBITDA) in the year running up to the deal’s financial close in January 2018.

Mid-way through last year the company boasted 3.2 GW of operating assets and a 39 GW pipeline of onshore solar and wind, offshore wind, and energy storage across Japan, North Asia, Australia, Southeast Asia, and India, according to the Vena’s June 2024 investor update.

Vena’s 2023 EBITDA was USD 389.8m, with cashflow for the following half year dipping to USD 186m due to the strong US dollar.

While the seller expects that this growth and Vena’s scarcity value will justify a USD 10bn equity valuation, there are three reasons that might not be the case, a source has previously told Infralogic.

He said that the buyers are no longer willing to pay as much for a large pipeline; offshore wind accounts for 19 GW of the development pipeline; and infrastructure managers have become less active in a higher interest rate environment.

The economics of offshore wind have come under pressure around the world due to the pandemic but also because of increased construction costs, he said.

GIP declined to comment. Morgan Stanley, MUFG, and Vena did not respond to requests for comment.