NEW DELHI: Embattled Adani The group on Sunday said it repaid loans totaling $2.65 billion to complete a prepayment program ahead of a March 31 deadline to deleverage overall in a bid to regain investor confidence after a damaging report a US short seller.
In a statement, Adani Group said it had repaid $2.15 billion in loans it had pledged shares in the conglomerate’s listed companies as well as another $500 million in loans it had taken out for the acquisition of Ambuja cement.
The announcement comes days after the group said it has prepaid loans of Rs 7,374 crore (about $902 billion) which has been pledged in shares of four companies in the group. This has now been scaled down to $2.15 billion.
Though Adani Group did not detail the source of money for repaying the loans, these came just days after the promoters sold minority stakes in four listed companies to US-based GQG Partners for Rs 15,446 crore.
“Continuing the promoters’ commitment to repay the promoter’s leverage, Adani completed the full prepayment of margin-linked equity-backed financing for a $2.15 billion business combination, well ahead of the committed timeline on 31 March 2023,” he said. “In addition to the above, the promoters have also prepaid a $500 million facility Ambuja acquisition financing.”
This, he said, was in line with the promoters’ commitment to increase the equity contribution and the promoters have now infused $2.6 billion out of a total acquisition value of $6.6 billion for Ambuja and ACC.
“The entire $2.65 billion prepayment program was completed within 6 weeks, which is testament to strong cash management and access to sponsor-level capital, complementing the robust capital prudence employed across all portfolio company,” the statement said.
The latest announcement of the prepayment of the Rs 7,374 crore share-backed loan on 7 March was followed by more shares belonging to group companies pledged as collateral for loans taken by the group’s flagship company.
On March 8 SBICap Trustee in the notices to the exchanges it had stated that a further 0.99% of Adani Green Energy Ltd shares had been pledged “for the benefit of the lenders” of Adani Enterprises Ltd. A further 0.76% of Adani Green Energy Ltd shares Adani transmission Ltd were also pledged to banks, the trustee said.
With the latest commitment, the total shares of Adani Green Energy Ltd – the group’s renewable energy company – which were tied to SBICap was 2%. In the case of Adani Transmission, this was 1.32%.
The March 7 filing said that the repayment of Rs 7,374 crore will release the pledge on the promoters’ shares in four group companies, and along with the repayments made earlier, the group has prepaid $2.016 billion in equity-backed financing.
Founding President Gautam Adani and his brother Rajesh on behalf of SB Adani Family Trust on March 2 announced the sale of shares in the flagship incubator Adani Enterprises Ltd (AEL), the port company Adani Ports and Special Economic Zone Ltd (APSEZ), the electricity transmission company Adani Transmission Ltd (AEL) and the renewable energy company Adani Green Energy Ltd (AGEL) ).
That sale has helped the group transform the narrative since US short seller Hindenburg Research released a damning report on Jan. 24.
The 10 listed companies of the Adani group, which together had lost about $135 billion in market value following the report, have since seen share prices soar in successive trading sessions.
In September last year, CreditSights, a unit of the Fitch group, said the group was “deeply overleveraged” as it used the debt to expand an empire centered around ports and coal mines to include airports, data centers and cement. as well as green energy.
In its Jan. 24 report, US short seller Hindenburg Research signaled “substantial” levels of debt at the group as it accused accounting fraud and the use of offshore shell companies to inflate stock prices.
The group denied all of Hindenburg’s allegations, calling them “harmful”, “baseless” and a “calculated attack on India”.
He now hopes to salvage the narrative by choosing slow and steady growth over the mostly debt-fueled expansive spree of recent years.
It has already scrapped its Rs 7,000 crore coal-fired power plant purchase, decided not to bid for a stake in state-backed energy trading company PTC, curbed spending, repaid some debts and promised to repay more.
Adani Group’s gross debt has doubled in the past four years. It has nearly $2 billion worth of foreign currency bonds due in 2024.
The group’s gross debt grew from Rs 1.11 lakh crore in 2019 to Rs 2.21 lakh crore in 2023, according to a presentation made to investors last month.
After including cash, the net debt was Rs 1.89 lakh crore in 2023.
In a statement, Adani Group said it had repaid $2.15 billion in loans it had pledged shares in the conglomerate’s listed companies as well as another $500 million in loans it had taken out for the acquisition of Ambuja cement.
The announcement comes days after the group said it has prepaid loans of Rs 7,374 crore (about $902 billion) which has been pledged in shares of four companies in the group. This has now been scaled down to $2.15 billion.
Though Adani Group did not detail the source of money for repaying the loans, these came just days after the promoters sold minority stakes in four listed companies to US-based GQG Partners for Rs 15,446 crore.
“Continuing the promoters’ commitment to repay the promoter’s leverage, Adani completed the full prepayment of margin-linked equity-backed financing for a $2.15 billion business combination, well ahead of the committed timeline on 31 March 2023,” he said. “In addition to the above, the promoters have also prepaid a $500 million facility Ambuja acquisition financing.”
This, he said, was in line with the promoters’ commitment to increase the equity contribution and the promoters have now infused $2.6 billion out of a total acquisition value of $6.6 billion for Ambuja and ACC.
“The entire $2.65 billion prepayment program was completed within 6 weeks, which is testament to strong cash management and access to sponsor-level capital, complementing the robust capital prudence employed across all portfolio company,” the statement said.
The latest announcement of the prepayment of the Rs 7,374 crore share-backed loan on 7 March was followed by more shares belonging to group companies pledged as collateral for loans taken by the group’s flagship company.
On March 8 SBICap Trustee in the notices to the exchanges it had stated that a further 0.99% of Adani Green Energy Ltd shares had been pledged “for the benefit of the lenders” of Adani Enterprises Ltd. A further 0.76% of Adani Green Energy Ltd shares Adani transmission Ltd were also pledged to banks, the trustee said.
With the latest commitment, the total shares of Adani Green Energy Ltd – the group’s renewable energy company – which were tied to SBICap was 2%. In the case of Adani Transmission, this was 1.32%.
The March 7 filing said that the repayment of Rs 7,374 crore will release the pledge on the promoters’ shares in four group companies, and along with the repayments made earlier, the group has prepaid $2.016 billion in equity-backed financing.
Founding President Gautam Adani and his brother Rajesh on behalf of SB Adani Family Trust on March 2 announced the sale of shares in the flagship incubator Adani Enterprises Ltd (AEL), the port company Adani Ports and Special Economic Zone Ltd (APSEZ), the electricity transmission company Adani Transmission Ltd (AEL) and the renewable energy company Adani Green Energy Ltd (AGEL) ).
That sale has helped the group transform the narrative since US short seller Hindenburg Research released a damning report on Jan. 24.
The 10 listed companies of the Adani group, which together had lost about $135 billion in market value following the report, have since seen share prices soar in successive trading sessions.
In September last year, CreditSights, a unit of the Fitch group, said the group was “deeply overleveraged” as it used the debt to expand an empire centered around ports and coal mines to include airports, data centers and cement. as well as green energy.
In its Jan. 24 report, US short seller Hindenburg Research signaled “substantial” levels of debt at the group as it accused accounting fraud and the use of offshore shell companies to inflate stock prices.
The group denied all of Hindenburg’s allegations, calling them “harmful”, “baseless” and a “calculated attack on India”.
He now hopes to salvage the narrative by choosing slow and steady growth over the mostly debt-fueled expansive spree of recent years.
It has already scrapped its Rs 7,000 crore coal-fired power plant purchase, decided not to bid for a stake in state-backed energy trading company PTC, curbed spending, repaid some debts and promised to repay more.
Adani Group’s gross debt has doubled in the past four years. It has nearly $2 billion worth of foreign currency bonds due in 2024.
The group’s gross debt grew from Rs 1.11 lakh crore in 2019 to Rs 2.21 lakh crore in 2023, according to a presentation made to investors last month.
After including cash, the net debt was Rs 1.89 lakh crore in 2023.
