Billionaire Gautam Adani-controlled Adani Group has completed a US$3.5 billion ($4.8 billion) funding package to refinance debt used to purchase Ambuja Cements Ltd. and ACC Ltd., in a growing sign of confidence among creditors in the conglomerate that faced a scathing short seller attack in January.
“Adani Cement, through Endeavour Trade and Investment Ltd., has entered into definitive agreements” for the facility, the company said in a statement Friday. The deal — among the top 10 biggest loans in Asia this year — was concluded with a group of 10 international banks with debt maturity of up to three years, the company said.
The refinancing will result in an overall cost saving of US$300 million for Adani Cement, it said. DBS Bank, First Abu Dhabi Bank, Mizuho Bank and MUFG Bank acted as mandated lead arrangers and bookrunners, as well as underwriter to the transaction while Barclays Bank, Deutsche Bank AG and BNP Paribas were among the other banks in the deal.
The transaction, which involved months of negotiations, shows the ports-to-power conglomerate is back in business with many of the lenders who had become wary of the group following corporate fraud allegations by Hindenburg Research. Despite Adani Group strongly denying these accusations, its bonds and shares plunged earlier in the year and are still trying to recover. A court-mandated probe by India’s market regulator is underway to assess if the conglomerate violated any local securities laws.
While the statement didn’t give any pricing details, people familiar with the matter had earlier said that the loan would likely be priced at 450-500 basis points all-in-costs over the benchmark secured overnight finance rate. The deal would comprise three tenors: six-month, 18-month and three-year, they also said, as Bloomberg News had previously reported.
Moving Past Hindenburg
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The group’s flagship firm, Adani Enterprises Ltd., raised 12.5 billion rupees ($206.2 million) by issuing local-currency bonds in July, as the company sought to put the Hindenburg crisis behind it.
The conglomerate, which has interests spanning ports, airports, data centres and cement after it acquired the local units from Holcim Ltd. last year, has been trying to regain investor and creditor confidence. It has pared debt, retrieved pledged shares, held investor roadshows and lured billions of dollars from global investors such as Rajiv Jain’s GQG Partners and TotalEnergies SE.
While short-maturity bonds of Adani Group companies have risen from lows seen earlier in the year, the longer-maturity notes show some lingering concerns.
An Adani Green Energy Ltd. dollar debt security maturing next September is currently trading around 92 US cents on the dollar, up from a record low of about 63.6 US cents in February, data compiled by Bloomberg show. Longer-dated notes of Adani Electricity Mumbai Ltd. and Adani Ports & Special Economic Zone Ltd., both due in 2031, are indicated between 65 US cents to 68 US cents on the dollar — a level typically considered distressed.
