Reliance Industries Ltd (RIL) has signed a green loan equivalent of $ 736 million to finance its acquisition of Norwegian solar panel maker REC Solar Holdings, marking the first such financing for the Indian conglomerate, the company said on Monday.
ANZ, Credit Agricole, DBS Bank, HSBC and MUFG were the lenders of the loan, which was signed on November 29.
The loan is divided into a six-year $ 250 million term loan, a $ 150 million working capital facility and a five-year $ 460 million bank guarantee facility. ANZ and MUFG have each took $ 70 million on the term loan, while DBS and HSBC took $ 40 million each. Credit Agricole received $ 30 million, “said RIL.
DBS, HSBC and MUFG took equal shares of the working capital facility, while the first two named banks shared the bank guarantee facility equally.
The term loan earns an interest margin of around 120 to 125 bps against Libor.
REC Solar, incorporated in Singapore, is the borrower of the loan, while Reliance New Energy Solar, a wholly-owned subsidiary of RIL and the acquiring entity, is the guarantor.
Reliance New Energy Solar acquired the REC group from China National Bluestar (Group) Co. Ltd last October for an enterprise value of $ 771 million.
True, RIL said in June that it would invest ??75,000 crore in its clean energy boost over three years, which would be done through internal accruals. RIL plans to spend ??60,000 crore over four giga factories in Jamnagar to produce solar cells and modules, energy storage batteries, fuel cells and green hydrogen. One of the four factories will manufacture photovoltaic (PV) solar modules.
The loan is also a rare acquisition financing from the Indian oil-telecoms conglomerate, which has opted for a term loan instead of a short-term bridging loan as is generally the case in most financial situations. merger and acquisition, RIL said in a statement.
The loan was drawn on December 1, after which all of REC Solar’s outstanding debts were settled and the acquisition was finalized, RIL added.
REC Solar is a 25-year-old company with three manufacturing plants – two in Norway for manufacturing solar grade polysilicon and one in Singapore for manufacturing photovoltaic cells and modules.
RIL plans to use REC Solar’s cutting-edge technology in its gigantic, fully integrated, metallic silicon photovoltaic panel manufacturing plant at the Dhirubhai Ambani Green Energy Giga Complex, Jamnagar, initially starting with a capacity of 4 GW per year and increasing to 10 GW per year.
Green Funding is RIL’s only loan so far this year. In November of last year, RIL closed a $ 1.4 billion club loan with 14 banks.
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