Taking benefit of worldwide capital pouring billions into corporations that care about local weather change, atmosphere, social and governance (ESG), UPL is elevating $500 million in debt financing, the primary Indian firm to take such sustainability linked loans, to swap its high-cost debt and faucet a brand new pool of aware traders, mentioned folks within the know.
In July 2018, it agreed to accumulate agri-pesticides maker Arysta LifeScience Inc. for $4.2 billion in money. The acquisition was funded primarily through a $3-billion mortgage from Japanese financial institutions MUFG and RaboBank of The Netherlands.
“ESG investing is becoming massive around the world. The new facility will help us tap a new investor base while simultaneously reduce our cost of borrowings by 35 basis points,” mentioned Jaidev Shroff, international CEO of UPL. “We have been consistently prepaying our loan obligations and will continue to do so.”
These five-year loans, additionally to be syndicated by the 2 international banks, are linked to particular environmental targets for UPL beginning March 2020 – scale back water consumption by 20% and minimize carbon emissions and waste disposal by 25% over 5 years.
The papers will subsequently be bought right down to monetary establishments, asset managers, non-public wealth shoppers, and household workplaces all over the world, particularly in Europe, Japan, and the US. If the targets are achieved, the corporate will be capable of scale back charges by an extra 5 foundation factors.
“UPL has been ranked the No. 1 agrochemicals company globally by Sustainalytics ESG Risk Rating Report and is also the only crop protection company to find a mention in S&P’s Global Sustainability Yearbook 2021,” mentioned Shashank Joshi, head of company banking at MUFG.