A $500 million Adani debt that was due on March 7, 2023, has been paid off by the Group, adding to a string of previous payments made by the Indian conglomerate as it works to restore public confidence in its financial soundness following a devastating short seller report. The money was released to lenders on the same day.
According to Hindenburg report Adani published in late January that caused Adani assets to decline, several banks have resisted refinancing the loan. Since then, billionaire Gautam Adani’s empire has redeemed around $2 billion in loans backed by shares, punctually repaid bonds, and received a $1.9 billion investment from famous investor Rajiv Jain of GQG Partners.
The repayments have assisted in reducing losses in the Group’s market value from as high as $153 billion to approximately $124 billion.
As part of its promoters’ resolve to reduce total Adani debt backed by shares of the Group’s listed firms, the Group has prepaid share-backed borrowing worth Rs 7,374 crore to different foreign banks and Indian financial institutions. Adani Enterprises Ltd promoters will release 31 million shares or 4% of the company. In comparison, according to a statement from the Group, Adani Ports promoters will release 155 million shares or 11.8% of the company.
Adani Green Energy and Adani Transmission promoters will sell 1.2% and 4.5% interest in their enterprises.
Adani received a $4.5 billion loan from global banks to finance the purchase of Holcim Ltd. cement assets last year, with a portion due March 9. The loan’s next instalment is expected in 2024. Adani Ports, a group company, will buy back bonds worth up to $300 million from its investors using its cash. A unit of India’s Adani Group, it would seek to buy back up to $130mn of its outstanding Adani debt.
In the following years, the firm expects total redemptions of Rs. 90,000 crore, which includes international bonds and commercial papers. Because of solid cash flows and asset ratings, the Adani Group is unlikely to experience difficulties repaying its bonds in local and foreign markets. All of the bonds issued by operational corporations have positive cash flows, growth, and scalability. As a result, they are having difficulty fulfilling their commitments on time because their outstanding debt is low.
Furthermore, there is no liquidity crisis, and assets are in good condition due to AA and higher ratings. The Adani group expects to redeem Rs. 90,000 crore in international bonds and commercial paper (CP) over the next few years. This redemption proves that the Adani debt repayment concerns will unlikely affect the Adani group.
Adani has paid USD 2,016 million of share-backed financing in addition to the repayments made earlier in February, consistent with the promoters’ pledge to prepay all share-backed debt by March 31, 2023. Following a strong rebound rally that began last week, the new prepayment will take the share price of Adani Group firms even higher.
Following the Group’s promise on Adani debt payments and a Rs. 15,000 crore investment in four listed firms by US boutique investment company GQG Partners, shares of ten listed Adani Group companies have made a significant comeback, making for successive trading days.
The organisation refuted all Hindenburg charges, calling them “malicious”, “baseless”, and a “calculated attack on India.” Adani Group has attempted to reclaim the narrative by favouring moderate and steady growth over the Adani debt-fuelled expansion frenzy. It has previously cancelled a Rs 7,000-crore coal plant deal, declined to bid for a share in the state-backed energy trading business PTC, cut costs, returned some debt, and planned to refund more.
Adani Group’s total debt has more than quadrupled in the previous four years. According to its regulatory filing, the company has about USD 2 billion in foreign-currency obligations due for repayment in 2024.
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