Avaada seeks $800 million to refinance Brookfield Asset Management debt

Mumbai: Vineet Mittal-led Avaada Group is seeking to raise about $800 million through a mix of offshore loans and local bonds to refinance existing debt from Brookfield Asset Management, multiple people aware of the matter told ET.

DBS Bank, MUFG, Nomura Holdings, Standard Chartered, JPMorgan Chase, Verdafin Capital and Barclays are helping arrange the funds, said the people cited above.

The refinancing is aimed at lowering finance costs ahead of the group's planned public market listing.


The proposed fundraising is expected to be split almost equally between offshore borrowings under the central bank's external commercial borrowing (ECB) route and domestic non-convertible debentures (NCDs), sources said.

Spokespersons of DBS Bank, Barclays and Standard Chartered Bank declined to comment while other lenders including Avaada did not immediately respond to requests for comment. Verdafin could not be reached for comment.

The refinancing is expected to reduce borrowing costs by up to 3 percentage points compared with the existing Brookfield facility, which was denominated in dollars and became more expensive due to currency appreciation and accrued costs over time, one of the persons said.

"There is no maturity pressure. It is purely a cost-optimisation exercise," a person directly aware of the discussions said, adding that the debt is expected to be priced in the low teens and completed within the current quarter.

Brookfield Funding

The refinancing will replace part of the $1 billion zero-coupon, senior unsecured optionally convertible debentures issued to Brookfield Renewable in March 2023 under Brookfield's Global Energy Transition Fund.

Brookfield, through its Global Energy Transition Fund, had committed $1 billion to Avaada Ventures via optionally convertible debentures. Around $400 million was drawn in March 2023, of which nearly $230 million was infused into Avaada Energy, according to a recent India Ratings report.

The remaining amount was allocated to Avaada Electro, the group's solar module manufacturing business, and Avaada Green Fuels, its green hydrogen venture, while a portion was used for debt prepayment at Avaada Ventures.

India Ratings said Avaada Ventures still has an undrawn Brookfield commitment of nearly $600 million available across group businesses.

The refinancing comes as Avaada prepares for capital-intensive expansion across renewable energy generation and manufacturing. Avaada Electro Ltd recently secured approval from the Securities and Exchange Board of India for its proposed ₹9,000-10,000 crore IPO after confidentially filing draft papers last year.

The company currently operates over 8 GW of solar module manufacturing capacity and plans to add more than 10 GW over the next two years.