Adani Total Gas secures financing of $375 million from global lenders for CGD business expansion

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Adani Total Gas Ltd (ATGL) has secured financing of $375 million from global lenders for expanding its City Gas Distribution (CGD) business, the company said on September 20.

The company said the maiden financing of $375 million executed with international lenders include an initial commitment of $315 million with accordion feature to enhance the commitments.

The five international lenders participated in the initial financing includes BNP Paribas, DBS Bank, Mizuho Bank, MUFG Bank, and Sumitomo Mitsui Banking Corporation.

“The facility will fast track the capital expenditure program enabling ATGL to rapidly expand its CGD network into its 34 authorized Geographical Areas (GAs) across 13 states,” said the company.

The development agenda would cater to up to 14 percent of India’s population covering more than 200 million people, said ATGL. The expansion would deepen the penetration of Piped Natural Gas (PNG) and Compressed Natural Gas (CNG) infrastructure, creating an ecosystem for a gas-based economy, it added.

“Participation from the global lenders reinforces the potential of city gas distribution in its role as transition fuel,” said Parag Parikh, CFO of 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,” added Parikh.

The company said the move would support the Indian government’s aim of increasing the share of natural gas in the energy basket from 6 percent to 15 percent by 2030.

Latham & Watkins LLP and Saraf & Partners were the borrower’s counsel and Linklaters and Cyril Amarchand Mangaldas were the lender’s counsel for the financing, the company said.

ATGL is authorised in 34 Geographical Areas (GAs) while 19 GAs are owned by Indian Oil-Adani Gas Private Limited (IOAGPL), a 50:50 joint venture between Adani Total Gas Limited and Indian Oil Corporation Limited (IOCL).