Emerald Sri Lanka Fund exits investment in Panasian Power

Emerald Sri Lanka Fund exits investment in 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

NDB Capital Holdings CEO Senaka Kakiriwaragodage

Panasian Power CEO and Executive Director Pathmanatha Poddiwala

energy to the national grid. Emerald Sri Lanka Fund, along with other major shareholders, sold a 62% 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 RIL 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. Despite COVID-related disruptions to the Sri Lankan economy, Panasian Power recorded 63% increase in net profit in the fiscal year ending March 2021. Commenting on the growth of the Fund’s portfolio company, NDB Capital Holdings CEO and Panasian Power PLC Director Senaka Kakiriwaragodage said: “PAP is on 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 Ltd. (NDB Zephyr), to provide growth capital and management support to SMEs led by promising entrepreneurs. After investment, the fund assists 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, Panasian Power PLC CEO and Executive Director Pathmanatha Poddiwala 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 of diversifying into rooftop and ground-mounted solar power which made Panasian Power the most competitive IPP as per recent solar PV tender. Beyond the capital, the team’s local presence in Sri Lanka coupled with their global connections has been invaluable to us in terms of growing our pipeline and accelerating our international expansion. We appreciate their guidance to mark our presence in our first overseas hydro project in Zambia under Get-Fit scheme and achieving success on unique concepts like solar with agriculture for the first time in the country. I must specially thank Senaka Kakiriwaragodage for the dynamic role he played in the board and in key sub-committees such as the investment and audit committee to add significant value on financial reporting while strengthening best practices and corporate governance. ”

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 invalidating 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 Ltd., 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 an international presence.

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

The M&A Process of Panasian Power PLC was managed by NDB Investment Bank, also a subsidiary of NDB Capital. NDB Capital, NDB Zephyr and NDB Investment Bank belong to the largest financial conglomerate in Sri Lanka, the NDB Banking Group. NDB Bank, crowned as ‘Sri Lanka’s Best Bank 2021’ by the prestigious Global Finance Magazine of USA, fresh on the heels of being recognised as ‘The Bank of the Year Sri Lanka’, by The Banker Magazine UK, is the fourth largest listed bank in Sri Lanka and the parent company of the NDB Group. 

The only financial services conglomerate in Sri Lanka, NDB Group is uniquely positioned towards assisting the growth and development of the Sri Lankan capital market to provide its customers seamless access to the product and service offerings of all its group companies.