ICBC contributes $72.20 million AUD to the $1.87432 billion AUD term loan tranche of a $2.04932 billion AUD syndicated loan to Squadron Energy for the acquisition of CWP Renewables (Linked to Record ID#101370 and #101371)

Project narrative

On February 10, 2023, financial close was reached on a deal in which a syndicate of 11 banks, including the Agricultural Bank of China (ABC), Bank of China (BOC), and the Industrial and Commercial Bank of China (ICBC), entered into a $2.04932 billion AUD ($1.41774 billion USD) syndicated loan agreement with PG FinCo Pty Ltd — an Australia-incorporated special purpose vehicle (SPV) wholly owned by Australian renewable energy company Squadron Energy Pty Ltd., wholly owned by Australian privately-held investment company Tattarang owned by Australian billionaire Andrew Forrest and his family — for the acquisition of CWP Renewables. This loan was divided into four tranches: a $1.87432 billion AUD ($1.29667 billion USD) term loan tranche with a maturity period of five years and a final maturity date of February 10, 2028; a $30.00 million ($20.75 million USD) working capital tranche with a maturity period of five years and a final maturity date of February 10, 2028; a $30.00 million AUD GST loan tranche with a maturity period of five years and a final maturity date of February 10, 2028; a $115.00 million AUD ($79.56 million USD) letter of credit tranche with a maturity period of five years and a final maturity date of February 10, 2028. The majority of this debt carried an interest rate of BBSY plus a margin of 150 basis points (bps). The proceeds were to be used by the borrower to finance the acquisition of CWP Renewables, an Australian renewable energy company, from its owners Switzerland-headquartered Partners Group and CWP Group. ABC contributed $53.66 million AUD ($37.12 million USD), BOC contributed $93.67 million AUD ($64.80 million USD), and ICBC contributed $72.20 million AUD ($49.95 million USD) to the $1.87432 billion AUD term loan tranche. Record ID#101370 captures ABC's contribution. Record ID#101371 captures BOC's contribution. Record ID#101372 captures ICBC's contribution. In addition to the three Chinese state-owned banks, the following lenders contributed the respective amounts to the loan syndicate: Commonwealth Bank of Australia (CBA) ($203.92 million AUD; $141.07 million USD), HSBC Bank ($179.53 million AUD; $124.20 million USD), ING Group N.V. ($306.37 million AUD; $211.95 million USD), MUFG Bank, Ltd. ($179.53 million AUD), National Australia Bank Limited (NAB) ($108.30 million AUD; $74.92 million USD), Société Générale S.A. (SocGen) ($160.99 million AUD; $111.37 million USD), Sumitomo Mitsui Banking Corporation (SMBC) ($286.86 million AUD; $198.45 million USD), and Westpac Banking Corporation ($229.29 million AUD; $158.62 million USD). CBA was the sole provider of the $30 million AUD working capital tranche. NAB was the sole provider of the $30 million AUD GST loan tranche. CBA, MUFG, and Westpac provided the $115 million AUD letter of credit tranche; CBA contributed $28.75 million AUD ($19.89 million USD), MUFG contributed $28.75 million AUD, and Westpac contributed $57.50 million AUD ($39.78 million USD). CBA served as administrative agent. In addition to the debt, Squadron Energy used $1.951 billion AUD ($1.34972 billion USD) in equity for the $4.0032 billion AUD ($2.76745 billion USD) acquisition. On December 7, 2022, Squadron Energy announced that it signed an agreement to acquire CWP Renewables. Squadron Energy planned to integrate CWP into Squadron's existing business. The acquisition closed on March 10, 2023. This was the largest mergers & acquisition (M&A) deal in Australia's renewable energy sector to date. CWP Renewables is a vertically integrated renewables energy business with wind farms, solar farms, and battery farms that provides energy to Transurban, Woolworths Group, Sydney Airport, Commonwealth Bank, and Snowy Hydro. At the time of the acquisition, CWP operated over 1.1 GW of assets, including: the 270 MW Sapphire Wind Farm in New South Wales, the 435 MW Murra Warra I Wind Farm and the Murra Warra II Wind Farm in Victoria, and the 142 MW Crudine Ridge Wind Farm in New South Wales. CWP had approvals to construct four additional wind farms in New South Wales worth a combined 750 MW, the shovel-ready 414 MW Uungula Wind Farm, a 180 MW solar farm, two battery energy storage systems (BESS) power stations (including the construction-ready 30 MW Sapphire Battery), and the 64 MW Dubbo firming power station capable of using hydrogen, biofuels and hydrogen gas blends. CWP also had majority ownership of wind farm operator Windlab