Inox Clean Energy raises ₹3,400 crore from NaBFID to refinance Vibrant Energy debt

Mumbai: Inox Clean Energy Ltd (ICEL), part of Noida-based renewable energy company INOXGFL Group, is raising Rs 3,400 crore from National Bank for Financing Infrastructure and Development (NaBFID) via a 20-year loan.

The loan will be used to refinance ICEL’s debt after the acquisition of Macquarie Group's renewable energy platform Vibrant Energy.

The loan is likely to be priced between 8% and 8.50% and will be ring fenced through seven solar, wind and hybrid renewable energy projects of the company, people familiar with the deal said.


“Vibrant Energy has 13 special purpose vehicles (SPVs). The debt in seven of these SPVs is being refinanced by NaBFID under a restricted group (RG) structure,” said a person familiar with the details. “These SPVs have solar, wind and hybrid energy capacities and, more importantly, have long-term power purchase agreements (PPAs) with large companies like Amazon, SIFY and Ultratech.”

A restricted group (RG) structure in a loan agreement defines which subsidiaries or SPVs of a company will comply with the covenants and guarantees for the loan. The structure allows the lending company to identify which entities and cash flows will service the debt. If any of the entities fail to meet their part of the payments the SPVs in the group can step in, thus giving the lender comfort of repayment.

In December, INOXGFL announced that it will acquire Vibrant Energy, the Indian renewable energy platform owned by infrastructure investor Macquarie Asset Management, in a deal valued at an equity value of $200 million. Vibrant primarily sells electricity to corporate and industrial (C&I) customers, operates a renewable energy portfolio of about 800 MW, with an active pipeline of 3GW. The group develops open access renewable energy solutions (wind and solar) for corporate customers.

“The loan has been sanctioned and will be used to retire more expensive debt and also reduce the equity component in the company, which was high under Macquarie. This is in a way a top up loan for the company,” said a second person aware of the details.

Emails sent to Inox Clean Energy and NaBFID did not receive any response.

Last month, just before this acquisition was announced, ICEL withdrew its draft IPO filed in July last year, as the company said there had been significant changes in its financial position and business scope, including new, large acquisitions and updated capital structure.

Earlier this month, the company along with its subsidiary Inox Solar Limited, raised Rs 3,100 crore in equity, valuing the company at Rs 50,000 crore, from local and foreign investors namely, CalPERS (California Public Employees’ Retirement System), SUN Group Global and Authum Investments.