BackReliance avails $736 million green loan to fund REC Solar’s purchase
The borrowing is split into a $250m six-year term loan, a $150m working capital facility and a $336 million five-year bank guarantee facility. ANZ and MUFG took $70m each of the term loan, while DBS and HSBC took $40m apiece. Credit Agricole was allocated $30m, the RIL said
PremiumReliance Industries Ltd (RIL) has taken a $736 million equivalent green loan from five banks to fund its acquisition of Norwegian solar panel maker REC Solar Holdings, marking the first such financing for the retail-to-telecom conglomerate.
ANZ, Credit Agricole, DBS Bank, HSBC and MUFG were the lenders on the borrowing, which was signed on 29 November, RIL said in a statement on Monday.
“The borrowing is split into a $250m six-year term loan, a $150m working capital facility and a $336 million five-year bank guarantee facility. ANZ and MUFG took $70m each of the term loan, while DBS and HSBC took $40m apiece. Credit Agricole was allocated $30m," RIL said.
DBS, HSBC, and MUFG took equal shares of the working capital facility, while DBS and HSBC split the bank guarantee facility equally.
The term loan pays an interest margin of around 120bp–125bp over Libor.
Singapore-incorporated REC Solar is the borrower on the loan, while Reliance New Energy Solar, RIL’s wholly-owned unit and the acquiring entity, is the guarantor.
Reliance New Energy in October acquired REC group from China National Bluestar (Group) Co. Ltd at an enterprise value of $771 million.
The borrowing is a rare acquisition financing from RIL, which opted for a term borrowing instead of a short-term bridge facility as is typically used in most M&A situations, according to the company.
Drawdown of the loan took place on 1 December after which all outstanding liabilities at REC Solar were settled and the acquisition was completed, RIL added.
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