Hong Kong-listed ESR Group Limited (HK:1821) has secured a major five-year sustainability-linked loan and credit facility for a record $2.5 billion. This brings the company’s total sustainability-linked loans to nearly $7 billion. The company mentioned that the funding highlights its ability to obtain competitively priced financing through syndicated loans despite challenges in the industry and market fluctuations. ESR shares fell by 0.17% as of writing.
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ESR Group is a real estate management company focused on developing and maintaining properties, mainly in Asia.
ESR Achieves Milestone with Biggest Sustainability-Linked Loan
With this loan, ESR achieved a milestone of its largest sustainability-linked loan arrangement so far. Additionally, it ranks among the biggest in Southeast Asia’s real estate sector in 2024.
According to this latest loan arrangement, the loan’s interest rate is linked to two primary performance metrics: expanding solar power capacity and enhancing sustainability certifications for its properties. Meeting these targets will allow ESR to lower its borrowing costs. Meanwhile, ESR stated that the loan proceeds would be utilized for general corporate purposes, working capital, and refinancing existing debt.
ESR Considers Privatization for Future Growth
Last week, ESR revealed a privatization offer from a consortium of buyers, which will result in the delisting of its shares. The buyout consortium was led by Starwood Capital, Sixth Street, and SSW Partners and also includes ESR’s founders, Warburg Pincus and Qatar Investment Authority.
The consortium highlighted the importance of a strategic shift, which involves selling non-core assets and focusing on new industries to create long-term value. They believe this change will be most effective if the company operates privately.
What Is the Share Price Target for ESR Group?
As per the consensus rating on TipRanks, 1821 stock has received a Moderate Buy rating, supported by two Buy recommendations. The ESR Group share price forecast stands at HK$15.86, which implies an upside of 31.51% from the current level.
