Mumbai : JSA Advocates & Solicitors (JSA) advised Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO) in connection with its investment in the private placement of secured, senior, unlisted, redeemable and non-convertible debentures (NCDs) issued by Sahyadri Farmers Producer Company Limited.
The proceeds of the issuance were utilised towards: (i) financing eligible borrowers under the Company’s Farmer Credit Program, an agricultural lending programme operated by the Company for its members; and (ii) refinancing a portion of the Company’s existing indebtedness.
The transaction involved designing a bespoke security and cashflow structure for an agricultural financing programme, where the principal source of repayment comprised, receivables generated from loans extended by the Company to the farmers under its Farmer Credit Program, rather than traditional project or corporate cashflows.
A key challenge was structuring an enforceable security package that enabled FMO to obtain effective security over the downstream loan receivables while ensuring that the lending programme remained commercially operable. This required extensive structuring and negotiation of the security architecture, including an arrangement between the Company and the underlying borrowers to facilitate assignment of receivables, control over collections and an appropriate enforcement mechanism.
The transaction also required balancing the commercial requirements of an international development finance institution with the operational realities of an agricultural lending program.
The JSA Finance team was led by Soumitra Majumdar, Partner, with support from Shrijita Bhattacharya, Partner and Shekhar Shrivastava, Counsel.