Adani receives $3.5 billion refinance from global banks
Indian tycoon Gautam Adani has secured a $3.5 billion refinancing package from 10 international banks, showing that lenders’ support to his industrial group remains intact despite being the target of fraud allegations.
Adani Group, an empire that includes India’s largest commercial port operator and seven airports, has managed to maintain good relations with financiers after New York-based Hindenburg Research accused it of accountancy fraud and stock market manipulation in the latter part of January.. Used to be.
The group strongly denied the allegations but lost $150bn of market value at the lowest point in the trading rout.
“This reflects Adani’s strong reach and strong liquidity position in the global financial markets,” the group said in a statement.
Adani and its bankers have spent months working on a deal to refinance $3.5 billion of short-term debt taken last year as part of the $10 billion acquisition of two Indian assets of Swiss construction materials group Holcim, which Adani Has made it one of the largest cement companies in the country. the creator.
That international loan was crucial for Adani to beat out bidders which included Kumar Mangalam Birla’s UltraTech Cement and Sajjan Jindal’s JSW Group.
Adani’s expansion into cement comes as the Indian government is increasing capital spending to improve infrastructure ranging from transportation to logistics in the world’s most populous country.
Following the Hindenburg attack, Adani Group stepped in to repay $2.65 billion of share-backed debt, which was hit by a decline in the prices of listed Adani businesses. It also said it was working to reduce the debt-to-income ratio of group companies.
Ambuja and ACC – companies that Adani bought from Holcim last year – are valuable cash-generating assets. The group confirmed that dividends from the companies will be paid to Mauritius-based vehicle Endeavor Trade and Investment, the holding company, which will service the debt.
Endeavor was used to purchase Holcim’s shareholding. The ultimate beneficial owner of the unit was disclosed in a filing last year as Gautam Adani’s brother Vinod and his wife Preeti, who are not part of Adani’s management. However, Adani also said in the filing that Endeavor “belongs to the Adani Group”.
The group added another asset to its cement portfolio this year, buying Indian company Sanghi Cements in a $600 million deal.
“Adani Cements is back on its growth path through organic and inorganic initiatives,” said Satyadeep Jain, analyst covering the cement sector at Ambit Capital, citing the Sanghi deal and capacity expansion plans.
The refinancing comes in a heated political environment, with India’s main opposition party Congress promising to investigate Adani Group if it wins office next year.
“Banks appear to be confident that there will be no political turmoil,” said Hemindra Hazari, an independent analyst.
