The Adani Group is currently in discussions with lenders to refinance a substantial loan of $3.8 billion. This loan was initially obtained to acquire Holcim’s cement business in India last year. According to a report from Bloomberg, the conglomerate is exploring the possibility of converting the original loan into debt with a longer maturity period. They have already started individual discussions with lenders and anticipate finalizing the process within the next four months.
This refinancing endeavor marks a significant move for the Adani Group following the Hindenburg report earlier this year, which had a major impact on their market value, causing a loss of over $150 billion at one point. However, the group’s stocks have since rebounded as Gautam Adani, the chairman, focused on reducing debt and benefited from the infusion of funds by GQG Partners.
GQG Partners, a boutique investment firm, had previously invested $1.87 billion in four Adani group companies in March, providing much-needed capital to the conglomerate. Last month, reports indicated that GQG further increased its stakes in these companies by approximately 10%.
In recent developments, a panel appointed by the Supreme Court stated that it did not observe any clear evidence of manipulation in the significant rise in the Adani group’s stock prices earlier, based on data from the Securities and Exchange Board of India. This panel concluded that the surge could not be attributed to a single entity or a group of interconnected entities.
According to the Bloomberg report, banks such as Barclays, Deutsche Bank, Standard Chartered, and Mitsubishi UFJ Financial Group are in discussions to participate in the refinancing deal. Some lenders have approached their respective international credit teams for approval of the arrangement. In September, Swiss giant Holcim completed the sale of its Indian cement business, which includes Ambuja Cements and ACC, to the Adani Group for $6.4 billion in cash.
Earlier this month, the conglomerate announced that it had repaid loans totaling $2.65 billion as part of a prepayment program aimed at reducing overall leverage. The credit note revealed that $2.15 billion of the prepayment was made from loans secured by pledging shares in the group’s listed firms, while an additional $700 million was repaid for loans obtained for the acquisition of Ambuja Cement.
The Adani Group stated that its pre-tax earnings or EBITDA of listed firms saw a 36% increase to Rs 57,219 crore in the fiscal year that ended on March 31, 2023. They also emphasized that there is no significant refinancing risk or immediate liquidity requirement.
