India's Aditya Birla unit seeks $1.5 billion in rupee loans to buy Shell arm Solenergi, bankers say

Aditya Birla Eyes $1.5 Billion Rupee Loans for Solenergi Acquisition

Aditya Birla Renewables' Financing Strategy for Solenergi Deal

By Khushi Malhotra

Background of the Acquisition

MUMBAI, Oct 9 (Reuters) - India's Aditya Birla Renewables is seeking $1.5 billion in rupee-denominated loans to fund the acquisition of Shell Plc's Indian renewable energy arm and avoid a costlier bridge debt, three bankers aware of the discussions said. 

The renewable-energy arm of Aditya Birla Group agreed in July to acquire Solenergi Power, a Shell Plc unit that includes the Sprng Energy group companies, for $1.8 billion. 

Previous Financing Arrangements

The Aditya Birla Group firm had earlier secured a $1.6 billion bridge loan commitment from MUFG Bank to fund the acquisition, two bankers said. 

The bankers declined to be identified as they are not authorised to speak to the media. A spokesperson for Aditya Birla Renewables (ABRen) did not respond to Reuters queries sent by email on Thursday.

Shift to Rupee-Denominated Loans

The Indian company is now looking to raise longer-term rupee-denominated loans at the project level to avoid the bridge facility, the three bankers cited above said.

Advantages of Project Financing

Bridge financing is usually intended as interim funding and comes at a higher cost, while longer-term project financing is backed by assets and reduces the cost of funding.

Loan Structure and Terms

The tenor of the loans is expected to be around 80% of the project's lifecycle, one of the bankers said. 

It will likely be split across 17-20 special purpose vehicles holding individual projects, including some that are already operational and the balance under construction, one of the bankers cited above said.

Timeline and Bank Involvement

ABRen is not immediately required to make payment to Shell because the transaction is yet to close, giving it time to finalise the financing structure. 

The company has reached out to multiple Indian banks, including the State Bank of India and HDFC Bank, for the loans, the bankers added.

MUFG, SBI and HDFC Bank did not reply to requests for comment.

(Reporting by Khushi Malhotra; Editing by Harikrishnan Nair)