Adani Group receives bank approval to refinance $3.5B Ambuja Cements debt

Ambuja Cements Q2 FY24 Results: Consolidated PAT Rises to Rs. 792.96 Cr

The Adani Group, helmed by billionaire Gautam Adani, has achieved a significant milestone by securing approval from a consortium of leading banks. The conglomerate is set to receive a substantial syndicated loan, valued at approximately $3.5 billion, earmarked for the purpose of refinancing the debt incurred during the acquisition of Ambuja Cements Ltd. This move marks a pivotal moment in addressing the Ambuja Cements debt.

Barclays Plc, Deutsche Bank AG, and Standard Chartered Plc have emerged as key players in this financial arrangement, each pledging around $250 million towards the syndicated loan totaling $3.5 billion. The news, which was reported by Bloomberg on Tuesday, marks the successful conclusion of months of negotiations between the Adani Group and its lending partners.

In the midst of the global financial landscape, the Adani Group had previously secured a staggering $5.25 billion from a consortium of 14 global banks back in August to September 2022. This financial infusion was strategically orchestrated to facilitate the acquisition of two cement companies and the buyout of Holcim’s stake, which was based in Switzerland.

Initial reports indicated that the Adani Group was expected to repay at least $300 million from the original Ambuja facility. Subsequent to these developments, Bloomberg disclosed that DBS Group Holdings, First Abu Dhabi Bank, Mizuho Financial Group, Mitsubishi UFJ Financial Group, and Sumitomo Mitsui Banking Corp, among others, would contribute to this lending endeavor, with varying loan amounts.

In its most recent annual report, Ambuja Cements revealed the incorporation of three new wholly-owned subsidiaries. Two of these subsidiaries are focused on cement-related activities, while the third is dedicated to the ownership and leasing of aircraft.

  • Ambuja Concrete North Pvt. Ltd. and Ambuja Concrete West Pvt. Ltd. will both be actively engaged in the manufacturing and distribution of cement, RMX, and associated products and by-products. These subsidiaries have been established in the state of Gujarat.
  • LOTIS IFSC Pvt. Ltd., a subsidiary dedicated to aircraft ownership and leasing, has been incorporated with an authorized capital of Rs 1.7 crore. This unit finds its home in GIFT City, Gandhinagar.

Additionally, Ambuja Cements’ recent acquisition of a 56.74 percent stake in Saurashtra-based Sanghi Industries, valued at Rs 5,000 crore, signifies a significant move for the company. The acquisition will be funded through internal accruals and is slated for completion within the next 3-4 months.

Furthermore, the Adani Group has inked an inter-corporate deposit agreement with Sanghi Industries. Under this agreement, the Adani Group will provide an unsecured inter-corporate deposit worth Rs 300 crore to Sanghi Industries, which will be disbursed in one or more tranches and directed toward general corporate purposes.

About Adani Group:

The Adani Group is a multinational conglomerate headquartered in Ahmedabad, India. It was founded by Gautam Adani in 1988, with its initial emphasis on commodity trading. Since then, the Group has diversified its activities and now operates across several sectors, including port management, electric power generation and distribution, renewable energy, mining, airport operations, natural gas, food processing, and infrastructure. It is worth noting that coal-related enterprises account for more than 60 percent of the Adani Group’s revenue.

About Ambuja Cements:

Ambuja Cements Limited, previously known as Gujarat Ambuja Cement Limited, stands as a prominent Indian cement manufacturing company. The corporation caters to both domestic and international markets, marketing cement and clinker.

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