Adani Group May Abandon Plans to Raise $500 Million via Overseas Bonds
The Adani Group has reportedly decided to backtrack on its plans to raise $500 million through overseas bonds. According to the Economic Times, the company is now exploring alternative methods to refinance its first tranche of $4.5 billion loans, which were taken from global banks to purchase ACC and Ambuja Cements.
The acquisition made the Adani Group the second-largest cement producer in India, following the Aditya Birla Group’s UltraTech Cement. One source close to the matter has revealed that the company may consider using internal reserves to refinance the debt. The initial loans were raised from 14 international lenders, including Standard Chartered, Deutsche Bank, and Barclays.
In September of last year, there were reports that Gautam Adani had pledged his entire stake in ACC and Ambuja Cements, worth $12.5 billion, to foreign banks to fund the $6.5 billion acquisition. However, following a major dip in Adani stock prices, which halved the group’s market value by more than $100 billion and raised concerns over the company’s debt levels, Adani denied pledging any shares. The group stated that it had acquired ACC and Ambuja Cements for 51,825 crore rupees, of which 69% (35,885 crore rupees) was financed through foreign borrowing.
The conglomerate is currently in discussions with its lenders and has informed them that it may provide additional securities in the form of a cash buffer, if required. Additionally, the company is looking to prepay smaller ticket loans, starting with a $37 million interest payment, due in March. Although the company hasn’t faced margin calls on its pledges, it has proactively communicated to its lenders that it is seeking prepayment.
In conclusion, the Adani Group is reassessing its options for refinancing its loans from global banks, as it explores alternative methods, including using internal reserves and providing additional securities. The company is also looking to prepay smaller loans and has proactively communicated with its lenders about its intentions
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