Greenko plans to raise up to $1 bn via offshore bonds

MUMBAI: Hyderabad-based Greenko Energy, backed by Singapore sovereign wealth fund GIC, plans to raise up to $1 billion from international investors as the company seeks to retire a high-cost bank loan, said four people familiar with the matter.

The proceeds could also be used to expand capacity and other business purposes. This would be a green bond with a likely tenor of five or seven years. The final contours are not yet fixed. The size of the deal will likely vary in the range of $500 million and $1 billion, market sources ET.

The launch of the proposed bond sale is not yet finalised, although the window may soon be opened.

Barclays, DBS Bank, Deutsche, JP Morgan and HSBC are some of the foreign banks helping the proposed bond sale ahead of potential tightening of interest rates.

The company did not respond to ET’s mail. Individual banks could not be contacted immediately for comment.

Greenko Energy Holdings (GEH) is likely to be rated as a high-yield bond offering. On July 28, Moody’s rated the company Ba1, a notch lower than the lowest rank of the investment grade category.

In March, Japan-based financial services group Orix Corporation announced it had completed its acquisition of a 21.8% stake in the renewable energy developer GEH reflecting the future potential of the company.

“Portfolio diversification helps mitigate the risk of exposure to seasonal variations in the availability of renewable resources and strengthens GEH's expertise in an economy moving toward increased decarbonization,” Moody’s Investors Service said in a note.

About two months ago, Greenko signed up for “The Climate Pledge” by joining more than 200 companies, which promised to achieve the net-zero carbon target by 2040, a decade ahead of the Paris Agreement goal.

Greenko has an operational portfolio of 7.5 GW and a pipeline of 15 GW of wind, solar, hydro, and energy storage assets spread across 15 states in India.

“Greenko will continue to build upon its hallmark of environmental stewardship, through greenhouse gas mitigation, climate risk management, conservation and restoration of habitats, as well as circular economic approaches,” Anil Kumar Chalamalasetty, CEO and MD, Greenko Group, was quoted saying.

The benchmark US Treasury paper, a key gauge for offshore bond sales, is yielding 1.43 per cent. It is likely to rise after the US Federal Reserve gradually stops easy money flows. The US central bank has already announced a calendar for tapering that may end in June next year.