Virescent Renewable Energy Trust, led by KKR, raises 2,150cr in debt financing

Virescent Renewable Energy Trust, backed by KKR, has raised a whopping Rs2,150cr in debt financing from listed non-convertible bonds, long-term debt financing and working capital. The proceeds will mainly be used to refinance the debt at the SPV level and to finance future acquisitions.

Virescent raised around Rs1,000cr on its first issue on 3, 5 and 7 year tranches. This transaction marks the very first issue of a Renewable Energy InvIT in India, setting a new yield curve. The Company will mainly use the proceeds to refinance existing debt at the SPV level as well as to finance future acquisitions. The NCD structure benefits from a full set of restrictive covenants thus guaranteeing the highest national AAA rating by CRISIL and India Ratings. This is the first issue from the renewable energy sector in India to benefit from a double AAA rating, demonstrating that VRETs have a strong focus on the interests of creditors. The success of the transaction demonstrates the confidence of the investment community in the strength of the sponsor and in the solid business plan of VRET. Barclays Bank PLC, Trust Investment Advisors and ICICI Bank acted as arrangers of the issue.

In addition, Virescent has raised an additional Rs 1,000 of long-term financing from L&T Finance. This ensures full debt peg for the VRET’s immediate short-term acquisition pipeline. In addition, VRET has benefited from a working capital facility of Rs150cr from Tata Capital to improve its liquidity position and meet its credit rating requirements.

Sanjay Grewal, CEO of Virescent Infrastructure, said: “This incredible achievement is an important milestone in VRET’s journey, demonstrating our competitively priced fundraising capabilities with different instruments and maturity profiles and building lenders’ confidence in VRET. We look forward to working closely with our lenders as we continue to acquire high quality assets to achieve our initial growth goals ”. Additionally, we are extremely pleased to induct Akshay Jaitly to our Board of Directors and will benefit from his legal / regulatory knowledge and experience in the infrastructure and renewable energy sectors.

Financing at InvIT level involves a cash pooling mechanism as well as a cross-security guarantee, thus ensuring a cleaner capital structure, which benefits all lenders – NCD investors as well as long-term financiers.

Akshay Jaitly is the Chairman of 262 Advisors, based in Paris. He advises Indian, French and international companies with an interest in India on cross-border strategy and risk management. He is also involved in research initiatives on policy reform in India’s electricity and infrastructure sectors. and writes a regular column for BloombergQuint. Jaitly previously worked as a transactional lawyer for over 25 years, in the UK, Japan and India. In 2000, he co-founded Trilegal and was the head of their energy and infrastructure practice. He remains Trilegal’s senior advisor and is a member of their board of directors.

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