Mumbai: Greenko Group is in talks with bankers to raise Rs3,000 crore through selling bonds in domestic market as it looks to refinance debt of solar power projects, according to three people familiar with the development.
The bonds are said to be sold by 10 special purpose vehicles (SPVs), each issue worth Rs300 crore, under similar terms, said the first person, a bond dealer with a Mumbai-based bank. Under the proposed structure, each of these SPVs will provide financial support to other nine in case there is a shortfall in servicing bondholders.
The SPVs were floated to develop and operate solar power project at Kurnool Solar Park in Andhra Pradesh.
“The company has given an indicative rate and based on that we have submitted our bids for the coupon rate. The issue may most likely get closed next week," said the first person. All three people cited above requested anonymity.
Greenko plans to issue bonds maturing in 10 years with an option to call back these securities. Such call option is expected anytime between end of third to fifth year. In case the issuer of the bonds do not exercise the call option, the coupon rate, paid to the investors, will be raised.
Bonds are rated AA-(SO) by CARE Ratings.
“The above rating is based on credit enhancement in the form of financial support arrangement between the 10 solar power SPVs and structured payment mechanism associated with the terms of the proposed non-convertible debenture (NCD) issue," CARE said in rating rationale for one of the 10 SPVs, SEI Baskara Power Pvt. Ltd.
Apart strong parentage, ratings also derives strengthen from the fact that these SPVs have a long-term off-take arrangement through power purchase agreement with NTPC Ltd at a fixed tariff.
Hyderabad-based Greenko, a leading operator of clean energy projects in India, raised $1 billion through issuance of dollar-denominated bonds in July.
The company currently has over 2.7 GW of operating capacity and it plans to achieve 3.0 GW capacity by year December, according to information on its website.