Adani Ports proposes $195M discount buyback for 2024 dollar bond

Adani Ports proposes $195M discount buyback for 2024 dollar bond

Adani Ports and Special Economic Zone Ltd., a significant player in India’s corporate landscape, has announced plans for a substantial buyback of its 2024 dollar bonds at a noteworthy discount to their original issue price. This move marks the second tender offer initiated by the company in just a span of a few months.

In an official statement released on Wednesday, the company, which is a part of the renowned conglomerate supported by billionaire Gautam Adani, revealed its intention to finance this buyback using its substantial cash reserves. For bonds tendered by October 11th, Adani Ports will offer bondholders $975 for every $1,000 in principal. Subsequently, the offer price will decrease to $965 per $1,000.

The primary objective behind this Tender Offer, as stated by the company, is to proactively address its near-term debt maturities.

Adani Ports and its associated entities have been working diligently to rebuild investor confidence in the aftermath of recent challenges. A Hindenburg Research report, alleging corporate misconduct, triggered a significant selloff in both its bonds and shares. It’s worth noting that Adani officials have consistently refuted these allegations.

Following a drastic drop to 85.8 cents on the dollar in February following the Hindenburg report, the bonds have demonstrated resilience and were trading at 96.4 cents on the dollar as of Wednesday, based on Bloomberg-compiled prices.

Bond repurchases, exemplified by this move by Adani Ports, provide companies with the opportunity to reacquire their debt through tender offers to bondholders, enabling them to retire some or all of the securities ahead of their scheduled maturity date.

Adani’s decision to undertake this buyback contrasts with the prevailing global trend. In an environment where interest rates have seen sharp increases, many companies have been reducing their debt repurchasing activities. This strategy allows them to hold onto bonds with lower coupon rates for an extended period, thereby avoiding the necessity of securing more costly new debt.

Notably, the bond in question, set to mature in July of the following year, has an outstanding principal of $520 million, according to data compiled by Bloomberg. Bondholders have until 5:00 p.m. in New York on October 26th to participate in this tender offer.

About Adani Ports:

APSEZ Ltd., also known as Adani Ports and Special Economic Zone Limited, stands as India’s foremost private port operator and a comprehensive logistics solutions provider. Within a span of just under twenty years, we have established, procured, and enhanced an unmatched assortment of port infrastructure and services spanning across India.

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