The Adani group plans to pre-pay or repay share-backed loans worth between $690 million and $790 million by the end of March this year as it seeks to burnish its credit profile after a US short-seller attack.
Adani Green Energy also plans to refinance its 2024 bonds via an $800 million, three-year credit line. Those plans were presented by the Adani management to the group’s bondholders in Hong Kong on Tuesday.
A Bloomberg report, however, says that the Adani group isn’t seeking to refinance debtor inject capital. CFO Jugeshinder Singh apparently said that the group has enough money to repay debt due over the next three years in addition to an $800 million credit facility.
The conglomerate on Monday held a road show in Singapore, with presentations in Hong Kong planned till Wednesday. Sources said the roadshows were meant to win back investor confidence following the damaging Hindenburg report, which alleged the group had engaged in stock manipulation and accounting fraud.
The Adani group has denied these allegations. But it has not prevented a crash in group shares on the stock markets.
Since the release of the report, the Adani group has prepaid some of its debt, particularly the share-backed loans. Adani Ports and Special Economic Zone has cleared some of its obligations: Last week, it paid back Rs 1,000 crore to SBI Mutual Fund and Rs 500 crore to Aditya Birla Sun Life Mutual Fund on commercial papers that matured on February 20.
Earlier, APSEZ had said it would repay Rs 5,000 crore debt in the next fiscal year and a $500-million bridge loan due next month. It would also repay another Rs 1,000 crore of commercial papers due in March.
Adani also pre-paid $ 1.1 billion for the release of pledged shares of its firms ahead of the maturity in September 2024. These were the shares of APSEZ, Adani Green Energy and Adani Transmission. Subsequent reports claimed the promoters faced a margin call of $500 million on this $1.1 billion loan, which prompted them to prepay the entire sum.
Meanwhile, the State Bank of India on Tuesday said it has concluded a $1-billion (Rs 8,265 crore) syndicated social loan, the largest ESG (environmental, social, and governance) credit raised by a commercial bank in the Asia Pacific market. SBI did not disclose the borrowers or the project where it would utilise the ESG funds.
The social loan comes at a time the spotlight has turned on the domestic banking sector’s exposure to the Adani group. After announcing stellar third-quarter results, SBI disclosed the bank’s overall exposure to the conglomerate at 0.88 per cent of its loan book, or Rs 27,000 crore.
Stock rally
Shares of eight of the 10 listed firms of the Adani group ended with gains on Tuesday after taking a beating in recent sessions. Adani Enterprises stock jumped 14.22 per cent to settle at Rs 1,364.05 on the BSE.
During the day, it rallied 19 per cent to Rs 1,421.95. Shares of Adani Ports climbed 5.44 per cent, Adani Green Energy gained 5 per cent, Adani Wilmar rose 5 per cent and NDTV gained 4.99 per cent. Adani Power advanced 4.98 per cent, Ambuja Cements (3.75 per cent) and ACC (2.24per cent). However, Adani Transmission fell 5 per cent and Adani Total Gas declined 4.99 per cent.
Since January 24, when the US short seller Hindenburg Research came out with its report on the group, all 10 firms have lost Rs 12 lakh crore. At the current exchange rate, this translates to around $ 147 billion.
Audit advice
Adani Group needs a third-party audit of accounts to allay the fears of shareholders even though the concern over group debt may be “overstated”, a proxy advisory firm said. “In addition to the response to Hindenburg, who is not a stakeholder, Adani must care for its stakeholders (investors and lenders) and address all areas of concern,” SES said in a report.
Stakeholders EmpowermentServices (SES) said in its view “group debt concept concern may be overstated since each business (of the group)appears to be independently resilient to muster required cashflows to service debt”.
“With the exception that reputation loss will impact all companies, though in unequal measure on a case by case basis,” SES said listing out financial details of each of the group companies.