Cyril Amarchand Mangaldas (CAM) advised a group of lenders led by Bank of Baroda on a INR39.4 billion (USD477 million) loan to JSW Renewable Energy to build an 825MW hybrid power project in Karnataka state.
The project, which includes a 225MW solar project and a 600MW wind project, will be used to meet the energy needs of JSW Steel. The loan is secured by various assets, including real estate and equity shares.
CAM’s legal team assisted the consortium of lenders with structuring, drafting and finalising the financing documents.
They also advised on the sale of a portion of the loan to the Central Bank of India and the Bank of Maharashtra. Partner Ramanuj Kumar led the project financing team, which included principal associate Aiswarja Mohanty, senior associate Shrey Srivastava and associates Shradha Sharma, Tanvi Ramdas and Umang Pathak.
The legal team representing JSW Renewable included Rakesh Punamiya and Vaibhav Deshmukh.
In project finance transactions of a similar nature, it is critical to ensure that clean security is created over the assets and consents, if any, are identified upfront, Kumar told India Business Law Journal.
“Advice on security creation subsumes requirements under different laws such as property law, stamp law, registration law, contract law etc., and, depending on the nature of the security, requirements under both central and state laws have to be factored in,” he said.
“Further, project-related risks are identified pursuant to the due diligence exercise and are appropriately addressed by way of documentation. In transactions where the security package includes a pledge over the shares of a borrower or any subsidiary of the borrower, it is critical to review their constitutional documents and shareholders’ agreement to identify any restriction on the sale and transfer of shares of the borrower or their subsidiaries.”