Virescent RE Trust Ties-Up INR 2,150 Cr of Debt Financing

Highlights :

Virescent Renewable Energy Trust has:

  • Raised INR 1,000 cr via NCDs in the first ever issuance by a renewable energy InvIT from India
  • Tied up an additional INR 1,000 cr of long-term financing from L&T Finance
  • Avails INR 150 cr of working capital financing from Tata Capital
  • Proceeds will be primarily used for refinancing SPV level debt and for funding future acquisitions

Virescent Renewable Energy Trust (VRET), an infrastructure investment trust (InvIT), has raised INR 1000 crore in its debut issuance across 3, 5 and 7 year tranches. This transaction marks the first-ever issuance by a renewable energy InvIT in India.

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The company will primarily use the proceeds to refinance existing debt at the Special Purpose Vehicle (SPV) level as well as fund future acquisitions. The NCD structure benefits from a comprehensive covenant package, thereby ensuring the highest domestic rating of AAA by CRISIL and India Ratings, said VRET.

“This is the first issue from the renewable energy sector in India to benefit from a dual AAA rating, demonstrating the VRETs strong focus on creditor interests. The success of the transaction highlights the faith of the investor community in the strength of the Sponsor and VRET’s robust business plan,” it adds.

Barclays Bank PLC, Trust Investment Advisors and ICICI Bank acted as arrangers on the issuance.

Virescent RE Trust has also tied up an additional INR 1,000 crore of long-term financing from L&T Finance, amping to ensure complete debt tie-up for VRETs immediate near-term acquisition pipeline. Further, VRET has availed a working capital facility of INR 150 crore from Tata Capital to enhance its liquidity position and meet its credit rating requirements .

Funding at the InvIT level entails a cash pooling mechanism as well as cross-collateralisation of security, thereby ensuring a cleaner capital structure, this benefiting all lenders – NCD investors as well as long term financiers.

Mr. Sanjay Grewal, CEO, Virescent Infrastructure said “This incredible achievement is an important milestone in VRET’s journey, demonstrating our debt fund raising capabilities at competitive pricing with different instruments and maturity profiles and reposes the faith of lenders in VRET. We look forward to working closely with our lenders as we continue to acquire high-quality assets for achieving our initial growth targets”. Further, we are extremely happy to induct Mr. Akshay Jaitly on our Board and we will benefit from his legal / regulatory knowledge and experience in the infrastructure and renewable sectors.”

In September 2021, VRET was set-up as a private-listed InvIT and raised ~US$62mn of equity from a group of foreign and domestic investors, led by Alberta Investment Management Corporation (AIMCO).

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