Emerald Sri Lanka Fund divests from Panasian Power

Emerald Sri Lanka Fund, a pioneering private equity fund that supports small and mid-sized businesses in Sri Lanka, has announced its divestment in Panasian Power PLC (PAP), one of Sri Lanka’s leading renewable energy solution providers and suppliers of clean energy to the national grid. 

Emerald Sri Lanka Fund, along with other major shareholders, sold 62 percent stake of PAP to RIL Property PLC (RIL), a Sri Lankan conglomerate, for a total sale value of Rs. 1.7 billion. 

NDB Investment Bank acted as the exclusive financial advisor to the consortium of divesting shareholders and carried out a competitive M&A process to select R I L Property PLC as the successful investor.

The exit comes on the heels of strong growth by Panasian Power in the last two years. Since Emerald Sri Lanka Fund’s investment in Panasian Power, the company doubled its energy generation capacity to 22 megawatts. The expansion was mainly led by solar projects. 

Commenting on the growth of the Fund’s portfolio company, Senaka Kakiriwaragodage, CEO, NDB Capital Holdings and Director of Panasian Power PLC said, “PAP is in the forefront of generating affordable and sustainable energy for Sri Lanka. It has been an incredible journey working with the shareholders and management team towards achieving the company’s growth objectives. 

“On the back of its execution capabilities, Panasian Power has a strong project pipeline with plans to expand to over 30 megawatts within the next year and has already initiated expansion opportunities in overseas markets. We are excited to see the company’s sustainable growth even after our exit.”

The Emerald Sri Lanka Fund is the first institutional private equity fund dedicated to Sri Lanka. It was launched by NDB Zephyr Partners Limited (NDB Zephyr), to provide growth capital and management support to SMEs led by promising entrepreneurs. 

Following the investment, the Fund will assist its portfolio companies via active participation in areas such as strategic planning, management development, financial management, corporate governance, environment and social compliance and operational efficiencies. In July 2019, the Fund invested Rs. 400 million in PAP.

Commenting on the partnership with Emerald Sri Lanka Fund, Pathmanatha Poddiwala, CEO and Executive Director, Panasian Power PLC said, “The Emerald Sri Lanka Fund team has been a terrific partner as we’ve grown the business. The Fund’s arrival was the key milestone in the company to achieve its strategic target on diversifying into rooftop and ground mounted solar power which made Panasian Power the most competitive IPP as per recent solar PV tender.” 

The Emerald Sri Lanka Fund’s investments span across food and beverages, IT, consumer goods, leisure and construction sectors. This exit serves an important purpose in validating the private equity concept in Sri Lanka where a Fund will invest, build and harvest by selecting scalable businesses that require growth capital and spurring growth in such companies. 

This process results in the creation of strong corporate entities and benefits the broader economy whilst generating attractive returns to its investors. 

Having followed the same investment process, Emerald Fund is currently managing its second exit in JAT Holdings Limited, another portfolio company in the Private Equity Fund. This exit is being facilitated as JAT Holdings taps the public capital markets through an Initial Public Offering (IPO) as an innovative corporate entity with international presence.

Emerald Fund is managed by NDB Zephyr Partners Limited which is jointly owned by NDB Capital Holdings Limited, leading investment banking group in Sri Lanka, and Zephyr Management, L.P, a New York-based global emerging markets investment firm.