Adani Total Gas Ltd (ATGL) has obtained financing of $375 million from global lenders to expand its City Gas Distribution (CGD) business, the company announced on Friday.
The company stated that the maiden financing of $375 million concluded with international lenders includes an initial commitment of $315 million, with an accordion feature to increase the commitments.
BNP Paribas, DBS Bank, Mizuho Bank, MUFG Bank, and Sumitomo Mitsui Banking Corporation are the five global lenders who took part in the initial financing.
“The facility will fast track the capital expenditure program enabling ATGL to rapidly expand its CGD network into its 34 authorised Geographical Areas (GAs) across 13 states,” the company said in a statement.
According to ATGL, the development plan would serve up to 200 million people, or up to 14% of the entire population of India. The expansion would also create an atmosphere for a gas-based economy through increasing the reach of compressed natural gas (CNG) and piped natural gas (PNG) infrastructure.
“Participation from the global lenders reinforces the potential of city gas distribution in its role as transition fuel,” said Parag Parikh, CFO, ATGL. “This financing framework will drive ATGL’s sustained growth and will be a stepping-stone for future financing based on its capital management plan which will create a long-term value for all our stakeholders.”
Latham & Watkins LLP and Saraf & Partners were counsel for the borrower, while Linklaters and Cyril Amarchand Mangaldas served as counsel for the lenders in the financing.
The business stated that the action will help the Indian government achieve its goal of having 15 per cent more natural gas in the energy basket by 2030 compared to the current 6 per cent.
Of the 53 GAs, 19 are held by Indian Oil-Adani Gas Private Limited (IOAGPL), a 50:50 joint venture between Adani Total Gas Limited and Indian Oil Corporation Limited, and 34 are owned by ATGL.
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