Reliance takes $736 million green loan to finance REC Solar buy

Reliance Industries Ltd (RIL) has signed a $736 million-equivalent inexperienced mortgage to fund its acquisition of Norwegian photo voltaic panel producer REC Photo voltaic Holdings, marking the primary such financing for the Indian conglomerate, the corporate mentioned on Monday.

ANZ, Credit score Agricole, DBS Financial institution, HSBC and MUFG had been the lenders on the borrowing, which was signed on November 29.

“The borrowing is break up right into a $250 million six-year time period mortgage, a $150 million working capital facility and a $460 million five-year financial institution assure facility. ANZ and MUFG took $70m every of the time period mortgage, whereas DBS and HSBC took $40m apiece. Credit score Agricole was allotted $30m, ” RIL mentioned.

DBS, HSBC and MUFG took equal shares of the working capital facility, whereas the primary two named banks break up the financial institution assure facility equally.

The time period mortgage pays an curiosity margin of round 120bp–125bp over Libor.

Singapore-incorporated REC Photo voltaic is the borrower on the mortgage, whereas Reliance New Power Photo voltaic, an entirely owned subsidiary of RIL and the buying entity, is the guarantor.

Reliance New Power Photo voltaic this October acquired REC group from China Nationwide Bluestar (Group) Co. Ltd at an enterprise worth of $771 million.

To make certain, RIL this June mentioned it could be investing 75,000-crore in its clear power push over three years, which might be by means of inner accruals. RIL plans to spend 60,000 crore on 4 giga factories at Jamnagar to supply photo voltaic cells and modules, power storage batteries, gas cells and inexperienced hydrogen. One of many 4 factories will make photo voltaic photovoltaic (PV) modules.

The borrowing can be a uncommon acquisition financing from the Indian oil-to-telecoms conglomerate, which opted for a time period borrowing as an alternative of a short-term bridge facility as is usually employed in most M&A conditions, RIL mentioned in a press release.

Drawdown of the mortgage came about on December 1 after which all excellent liabilities at REC Photo voltaic had been settled and the acquisition was accomplished, RIL added.

REC Photo voltaic is a 25-year-old firm with three manufacturing amenities – two in Norway for making photo voltaic grade polysilicon and one in Singapore making photovoltaic cells and modules.

RIL plans to make use of REC Photo voltaic’s industry-leading know-how in its absolutely built-in, metallic silicon to PV panel manufacturing giga manufacturing facility at Dhirubhai Ambani Inexperienced Power Giga Complicated, Jamnagar, initially beginning with 4GW each year capability and ultimately rising to 10GW each year.

The inexperienced financing is the one mortgage from RIL up to now this 12 months. In November final 12 months RIL closed a $1.4bn membership mortgage with 14 banks.

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