Aditya Birla Group taps local lenders for Sprng Energy
Axis Bank has underwritten the entire amount and is likely to keep a large part of around Rs 5,000 crore to the financing, while State Bank of India and HDFC Bank are evaluating commitments for the remaining amount, the people said. Aditya Birla has also held discussions with six to seven other domestic lenders, but prefers to close the financing with two banks, or a maximum of three lenders,…
Mumbai: The Aditya Birla Group is in advanced talks with local banks to raise approximately ₹14,000 crore via a long-term loan syndication, aimed at financing its acquisition of Shell's Indian renewable energy platform, Sprng Energy, according to sources familiar with the matter. Axis Bank has committed to underwriting the entire loan amount, with around ₹5,000 crore allocated to the financing.
State Bank of India and HDFC Bank are assessing commitments for the remaining funds, sources said. Aditya Birla has also engaged in discussions with six to seven other domestic lenders, but is inclined to finalize the financing with two to three banks, sources said. The proposed financing is structured as a domestic lending syndication or club loan, secured against Sprng Energy's renewable power assets, with a potential tenor of up to 20 years and pricing below 8%, around 7.7%, according to sources.
International lenders like MUFG have evaluated the financing but have been unable to compete with the pricing offered by domestic banks, particularly Axis Bank, given its focus on long-tenor project finance in India, one source said. This acquisition is among the largest in India's renewable energy sector, both in value and scale, and is expected to value the business at ₹17,200 crore.
The equity consideration payable to the seller will be determined after accounting for debt, cash, and other items as specified in the transaction documents. The acquisition will add a contracted portfolio of around 5 GWp capacity, including 3.3 GWp of operational capacity and 1.7 GWp of under-construction capacity, along with a strong connectivity and development pipeline.
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