Virescent RE Trust partners with INR 2,150 Cr in debt financing

Strong points :

Virescent Renewable Energy Trust has:

  • Raise of INR 1000 via MNT in very first issuance of a renewable energy InvIT from India
  • Has tied up an additional INR 1,000 of long-term financing from L&T Finance
  • Benefit from INR 150 cr of working capital financing from Tata Capital
  • The proceeds will mainly be used to refinance the debt at the SPV level and to finance future acquisitions

Virescent Renewable Energy Trust (VRET), an infrastructure investment trust (InvIT), raised INR 1,000 crore on its first issue on 3, 5 and 7 year tranches. This transaction marks the very first issuance of a renewable energy InvIT in India.

The company will primarily use the proceeds to refinance existing debt at the Special Purpose Vehicle (SPV) level as well as to finance future acquisitions. The NCD structure benefits from a full set of covenants, thus securing the highest national AAA rating by CRISIL and India Ratings, said VRET.

“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, ”he adds.

Barclays Bank PLC, Trust Investment Advisors and ICICI Bank acted as arrangers of the issue.

Virescent RE Trust has also committed an additional INR 1,000 crore of long-term financing from L&T Finance, which ensures full debt peg for the immediate short-term acquisition pipeline of VRETs. In addition, VRET has benefited from an INR 150 crore working capital facility from Tata Capital to improve its liquidity position and meet its credit rating requirements.

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.

Mr. Sanjay Grewal, CEO of Virescent Infrastructure, said: “This incredible achievement is a milestone in VRET’s journey, demonstrating our competitively priced leveraged fundraising capabilities with different instruments and maturity profiles and is based on the 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 ”. In addition, we are extremely pleased to induct Mr. Akshay Jaitly to our Board of Directors and will benefit from his legal / regulatory knowledge and experience in the infrastructure and renewable energy sectors.

In September 2021, VRET was established as a publicly traded InvIT and raised approximately US $ 62 million in equity from a group of foreign and domestic investors, led by Alberta Investment Management Corporation (AIMCO).

Carol M. Barragan