Adani Group Prepays 4000 Crore INR Bridge Loan To Win Back The Trust Of Investors
Adani Group has repaid a 4000 crore INR bridge loan that was due on Thursday. The global banks have lent Adani 36,000 crore INR to finance the acquisition of Holcim Ltd. cement assets in the last year. A part of the debt was due in March. People have stated that the next installment of the loan will come in 2024.
Various sources have stated that Adani Group has repaid a 4000 crore INR bridge loan that was due on Thursday. The step taken by the Gujarat-based conglomerate can be called an initiative to regain the trust of investors after the shocking revelations by the Hindenburg report.
The people familiar with the matter have stated that the money was released to the lenders on Tuesday. Some banks have even bailed from refinancing the debt. It was caused by the short-seller attack that resulted in the Adani stocks plummeting.
Gautam Adani has prepaid about 16,000 crores INR of share-backed loans, and bond repayments on time. Furthermore, the steps taken by the Adani Group to secure its name in the Indian market have worked well since it successfully secured an investment worth 15000 crores by the star investor Rajiv Jain of GQG partners. The investments have helped the conglomerate to overcome the group’s losses in the market valuation to 10 lakhs crore INR from 12 lakhs crore INR.
Furthermore, global banks have lent Adani 36,000 crore INR to finance the acquisition of Holcim Ltd. cement assets in the last year. A part of the debt was due in March. People have stated that the next installment of the loan will come in 2024.
Adani group has denied replying on the matter.
The Adani Group has recently landed itself in a storm of controversy, which has caused its market cap to decline.
They have attempted to strengthen the finances, and thus, the decision has come in the early part of February after the alleged attack. The Group has planned to prepay a 500 million USD loan by the end of march.
They have lent from the following banks, including Barclays, Standard Chartered Plc, and Deutsche Bank, for the acquisition of Holcim Cement Ltd.
Initially, Gautam Adani approached the respective banks, asking them to refinance the loan. Later, he decided to repay the debt.
Adani Group’s attempt to regain the trust of investors:
It has been stated that the promoter family has undone some of the shareholder positions, availed their strategic finance facilities, and liquified the investments to prepay their liabilities. They have made it a goal to make the LAS portfolio zero within 45 days.
One of the officials has mentioned that the group may offer additional share securities to bring back the confidence of the investors.
The analysts of JP Morgan, Varun Ahuja, and Aman Aggarwal, have commented on the matter, stating that the main concern is at the promoter-level uncertainty rather than the opco level. The calculations show that there are 1.8 billion USD in promoter-level loans. After aggregating all the share pledges, one arrives at a 5.2 billion Usd of pledged stake value. It is of concern that the group has a 5 billion USD debt related to the Holcim India acquisition. The cement asset has a revenue of 1 billion USD and EBIDTA of 700 to 800 million USD as of September 2022.
Investors in the Adani Group companies are concerned that the governmental pressure could intensify the action of banks to ask the group to start part-repaying some of the near-term debt to deleverage. Bond markets have expressed fears about preventing the domino effect. Banks like Credit Suisse, and Citi have stopped using Adani securities as collaterals.
One of the major advantages amidst all the chaos is that most businesses like Adani Ports, Electricity, Transmission, and Green Energy are revenue-generating businesses. They must be in a position to take control of leverage when required.
In addition, Adani’s Mundra power plant has more debts than assets, totaling 1.8 billion USD in liabilities. According to credible media sources, the conglomerate has committed more than $1 billion in debt financing to paper.
Adani stock has been under intense pressure since January 24. Adani Group has taken numerous steps to regain investor trust, including global read shows. From March 7 to 15, the company will hold meetings with fixed-income investors in various locations, including Dubai, London, and the United States. It has been reported by credible news outlets.
Edited by Prakriti Arora