In an effort to reassure investors and creditors about the group’s liquidity position after a damning report by US-based short-seller Hindenburg Research on 24 January, Adani Group’s cash-rich ports and logistics arm Adani Ports and Special Economic Zone Ltd announced on Monday that it would buy back up to $130 million of the company’s outstanding bonds.
This is the first time that Adani Ports has ever repurchased bonds, and it is significant given the broad market worry about the group’s liquidity position following the Hindenburg Research research.
According to a statement to the press by the firm, Adani Ports issued $650 million in bonds that will maturity next year. The company expects to buy back all of these bonds in tranches at least once each quarter going forward.
Bonds with a 3.375% interest rate will be the subject of the $130 million buyback. $650 million worth of bonds issued by Adani Ports have varied coupon rates.
The corporation announced on Monday that its cash reserves would be used to pay for the repurchasing of the bonds. At the end of FY2023, the Adani Group had a cash reserve of at least 61,200 crore, the majority of which was recorded on Adani Ports’ financial accounts.
At one time, the firm had lost investor money of $145 billion as a result of the Hindenburg Research research. All stocks of Adani listed companies are still trading under pressure on markets, regardless of a slight improvement. To allay investor fears, the Adani Group has been taking several kinds of measures.
According to a Mint report published on April 18, Adani spent $3 billion during the just ended March quarter to repay bonds and discharge promoter pledges in its group businesses. By utilising the proceeds from the $1.88 billion in equity funding by GQG Partners and an additional $1 billion in promoter-group funding, the Adani group has significantly reduced its promoter-group pledges and settled bonds with three domestic mutual funds.
Reduced share pledging levels and debt prepayments by Adani have stopped the group’s stock price decline from increasing. In order to reduce promoter promises in four of the nine listed firms, the group spent at least $2.54 billion.
They are Adani Green Energy Ltd., Adani Transmission Ltd., Adani Enterprises Ltd., and Adani Ports and SEZ Ltd.
Adani Ports stated on Monday that the bond repurchase offer is being made to partially prepay the company’s upcoming loans and to demonstrate its strong liquidity position.
As dealer managers for Adani Ports, the following financial institutions have been chosen: Barclays Bank PLC, DBS Bank Ltd, Emirates NBD Bank PJSC, First Abu Dhabi Bank PJSC, MUFG Securities Asia Ltd Singapore Branch, SMBC Nikko Securities (Hong Kong) Ltd, and Standard Chartered Bank.
After the planned repurchase, which is expected to be finished before the end of May, at least $520 million worth of Adani Ports’ debts would still be outstanding, which the company plans to refinance.