Birla gets Rs 24,000 cr commitments for Shell deal
Kumar Mangalam Birla's conglomerate, Aditya Birla Group, has secured significant loan commitments totaling approximately Rs 24,000 crore ($2.5 billion) to acquire Shell Plc's renewable energy assets in India. This is 70% more than initially planned. Aditya Birla Renewables Ltd. aims to acquire 100% of Solenergi Power Pvt., which manages Shell's 5-gigawatt renewable energy portfolio in the country.
Axis Bank and State Bank of India have each committed up to Rs 70 billion, while Union Bank of India and Punjab National Bank have offered credit lines of around Rs 50 billion each. Other large Indian banks like HDFC Bank Ltd. and Kotak Mahindra Bank Ltd. are also reportedly in discussions with the conglomerate regarding potential credit lines.
The strong market response from Indian lenders, who began financing corporate acquisitions in July, highlights the lenders' keen interest in large-scale corporate deals. The Reserve Bank of India's decision to allow local banks to finance these acquisitions is expected to stimulate the Indian economy.
Interest rates on the club loan range from 7.6% to 7.7% with a tenor of 12 to 20 years. The loan is being provided through multiple special purpose vehicles backed by the company.
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