State Bank of India (SBI) is providing a loan of INR 2 billion ($25.9 million) to Indian renewable energy company Soham Renewable Energy India Pvt. Ltd at an interest rate of below 11%, according to two sources familiar with the matter.
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Piramal Group had earlier been in talks to provide a loan of the same size at around 12% to 14%, and with a top-up fee the internal rate of return on that facility could have been around 15%, said one of the first two sources and a third source.
The debt will be raised at the operating company level and will be used to buy out Macquarie Infrastructure and Real Assets Investments Ltd.’s compulsorily convertible preference shares (CCPS), the three sources said.
Business Standard reported in January 2013 that Soham Renewable Energy was in the process of raising INR 3.75 billion from the SBI Macquarie Infrastructure Fund which was taking up the investment through CCPS.
The company
website lists D.E. Shaw, Macquarie SBI Infrastructure Fund and SBI Macquarie Infrastructure Trust as investors. The website notes that Macquarie SBI Infrastructure and SBI Macquarie Infrastructure Trust are separately managed by a joint venture fund between State Bank of India, Macquarie Infrastructure and Real Assets, and the International Finance Corporation.
Piramal Group, Soham Renewable Energy and Macquarie Infrastructure declined to comment. SBI did not respond to the request for comment.
– Poonam Bansal, Dipika Lalwani