Did anyone notice the news out of Bloomberg yesterday? Reliance Capital is looking to go forward with a 1.5MW turbine from MY for a huge 2.5GW project in India. Google "China Ming Yang Reliance Energy" to get the full details on the partnership between the two companies from last year. Reliance is part of a huge conglomerate in India that includes the largest privately held energy and infrastructure company in India.
Here are more details on the partnership from last year:
Anil Ambani’s Reliance Group has entered into a strategic partnership w ith Chinese wind turbine maker China
Ming Yang Wind Power Group for developing up to 2,500 MW clean energy projects in India as well as in other South Asian countries. Ming Yang Wind Power has inked definitive agreements with Reliance Capital Ltd and related entities forming part of the Reliance Group.
The Chinese firm’s Singapore subsidiary Ming Yang Holdings (Singapore) Pte Ltd entered into the definitive
pacts. Ming Yang has also inked a Memorandum of Understanding (MoU) with Reliance Power to jointly develop a large portfolio of clean energy projects in India. Further, Ming Yang Holdings plans to establish a joint venture with Reliance group firm Reliance Capital by subscribing to a significant stake in the share capital of Global Wind Power Ltd (GWPL). GWPL is a leading wind power solutions provider in India, in which Reliance Capital and related entities are currently the largest shareholders.
“We are pleased to welcome Ming Yang to India, through their investment in GWPL. Development of clean power is a key priority for India and we at Reliance Power look forward to working with Ming Yang to further develop and enhance our portfolio in both wind and solar energy,” Reliance Power CEO, Mr J P Chalasani, said. As per the MoU, Ming Yang Wind Power is expected to provide total engineering, procurement and construction solutions, including micro-siting, wind resource assessment studies...
With this partnership, MY will have an approximate 30% market share of the Indian wind energy market. As the only pure play on wind energy in the US markets, MY could be a huge winner down the road.
The initial agreement stated that they would develop a large portfolio of clean energy projects with Reliance Power. Here are the details on the partnership:
"China Ming Yang Wind Power Group Limited (NYSE: MY), announced that the Company, through Ming Yang Holdings (Singapore) Pte. Ltd. ("Ming Yang Singapore"), its Singapore subsidiary, has entered into definitive agreements with Reliance Capital Limited and its related entities, forming part of Reliance Group ("Reliance"), one of India's largest private enterprises.
In addition, the Company has signed a Memorandum of Understanding ("MOU", together with the definitive agreements above mentioned, "Agreements") with Reliance Power Limited ("Reliance Power"), the largest private sector power company in India, both, in capacity under development as well as Market Cap, to co-develop a large portfolio of clean energy projects."
About a month ago, Reliance Capital announced its intention to invest about $15 to 20 Million into this JV (Giving an update on this partnership, Reliance Capital Chairman Anil Ambani today said that the agreement would be closed soon and an investment of Rs 100 crore would be made. "Our agreement with Ming Yang Power from China is in place. We believe that it will be closed shortly and investment of over Rs 100 crore will come through the joint venture," Ambani said while replying to shareholders' queries at Reliance Capital's Annual General Meeting here.).
With news yesterday out of Bloomberg it sounds like this partnership is finally kicking into gear. This could be why the stock is moving recently as this is a potentially game changing partnership for MY.
Sorry, one other thing...on MY's balance sheet they have "investments in joint ventures" listed at about $121 million as of 6/30/13, up about 8% from 12/31/12. While this is the dollar value invested in these joint ventures, consider that the Global Wind Energy ETF (FAN) is up 50% for the year so there may be upside to this valuation on their books. The company currently trades at a hefty discount to book value of $4.70 without an increase in the value of the joint ventures.