13th Jul 2021 09:00
(Alliance News) - Drax Group PLC on Tuesday said it has refinanced a Canadian dollar debt following the acquisition of biomass producer Pinnacle Renewable Energy Inc, which it sealed back in April.
The Selby, England-based electrical power station operator said a new CAD300 million, about GBP173.6 million, facility matures in 2024. It also has a two-year extension option.
Drax added its all-in cost of debt will now be trimmed below 3.5%.
The loan also includes an environmental, social and governance aspect which may adjust the margin the Drax pays, based on its carbon intensity. The amount of carbon dioxide Drax produces will be measured against a benchmark, it noted.
The new facility replaces Pinnacle's CAD435 million financing, which had a cost of debt of over 5.5%.
Drax back in February agreed to acquire Pinnacle in a deal that gave the Canadian biomass producer an implied enterprise value of CAD741 million, including net debt of CAD356 million. The deal closed in April.
Drax shares were flat at 429.20 pence each in London on Tuesday morning.
By Eric Cunha; [email protected]
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