Adani Group Engages in Debt Refinancing Talks Following Hindenburg Controversy
Adani Group, a prominent Indian conglomerate, is currently in discussions with global banks and lenders to refinance a loan facility of up to $3.8 billion. The loan was initially obtained for the acquisition of Ambuja Cements Ltd. in the previous year. Sources familiar with the matter revealed that Adani is considering converting the original loan into a longer-term debt and has begun individual talks with banks to explore this possibility. The discussions are confidential and have not been publicly disclosed.
This debt refinancing effort serves as a crucial test for Adani Group, as it seeks to regain the confidence of global credit lines following the corporate malfeasance allegations made against it by US shortseller Hindenburg in January. Adani has vehemently denied these accusations.
The refinancing process is expected to conclude within three to four months, and most of the existing lenders are anticipated to participate. Despite a request for comment, The company’s spokesperson did not respond immediately.
Notably, Barclays Plc, Deutsche Bank AG, Standard Chartered Plc, and Mitsubishi UFJ Financial Group Inc. are reportedly engaging in discussions to be part of the refinancing deal. However, it should be emphasized that the deal has not yet been finalized and may not proceed as planned. Representatives from Barclays, Deutsche, MUFG, and Standard Chartered declined to comment on the matter.
Should the refinancing plan move forward, it would mark a significant milestone in Adani Group’s journey to restore normalcy after enduring months of damage control following Hindenburg’s scathing attack, which caused a substantial decline of over $150 billion in the company’s stocks.
In a recent report, a panel of experts appointed by India’s Supreme Court stated that there was no regulatory failure or misconduct contributing to the volatile swings in the company’s stock prices. However, a verdict from India’s securities watchdog is expected in August after concluding its investigation into Hindenburg’s allegations against the Adani Group.
Last year, the company made headlines with its acquisition of Holcim AG’s Indian cement assets, solidifying its position as the country’s second-largest cement producer. To finance the acquisition, Adani Group’s vehicle, Endeavour Trade & Investment, secured bridge loans with maturities in 2023 and 2024. These loans were obtained through a Mauritius-based entity.
About Adani Group:
The Adani Group is a multinational conglomerate based in Ahmedabad, India. It was established by Gautam Adani in 1988, initially focusing on commodity trading. Over the years, the Group has expanded its operations to encompass various sectors such as port management, electric power generation and transmission, renewable energy, mining, airport operations, natural gas, food processing, and infrastructure. Notably, coal-related businesses contribute to over 60 percent of the Adani Group’s revenue.
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