Adani to refinance two dollar bonds, prepay share pledges

Mumbai: The Adani Group will seek to refinance about $1.2 billion worth of foreign-currency bonds ahead of maturity and prune discretionary capital expenditure, key finance executives at the conglomerate told investors during a conference call late Thursday. Further, the group will prepay all loans against shares over the next few weeks.

Adani Group's chief financial officer Jugeshinder 'Robbie' Singh and head of group corporate finance Anupam Misra told investors that they are working on a "full finance plan" to refinance Adani Green Energy's $750-million, 4.375% bond due in September 2024 one year ahead of maturity.

The infrastructure conglomerate also plans to fully finance Adani Green Energy's $460-million restricted group 1 bond due in December 2024 with a 15-year fully amortising privately placed paper, the management told investors. "The discussions are in advanced stages and will reach completion shortly," Singh said during the late-evening call.


Furthermore, Adani plans to completely pre-pay all loans against shares over the next 20 days to ensure that after debt repayment, borrowings are not linked to the value of the share, potentially triggering margin calls.

Seeks To Pare Net Debt/Ebitda to Below 3x
To be sure, Adani Group has repaid $1.1 billion worth of loans against its shares last week.

These coordinated measures, aimed at restoring investor confidence, follow allegations of financial 'fraud', misgovernance and stock price 'manipulation' by US short-seller Hindenburg Research late last month. The conglomerate has, since then, lost more than $120 billion in market capitalisation, with several stocks continuing to hit their daily permissible lower limits.

The Adani Group has denied the allegations made by the short-seller.

On Thursday, the Adani management also assured investors that the finance plan for the $750-million bond will be ready by the end of June this year as it is one of the most "mispriced and volatile" papers outstanding in the market. This bond is trading at yields of 15-16%, up from 10% on January 25, when the Hindenburg report became public.

The group will also seek to repay $390 million in loans at Adani Transmission with free cash flow or an underwritten plan. Apart from these three maturities, Adani does not have any large maturity repayment liability across issuers until 2026-27, Singh said.

Adani will continue with the deleveraging plan and seek to cut its net debt-to-EBITDA (operating profit) to below the multiple of 3 across its portfolio next year from 3.2x. It will prune discretionary capital expenditure to bring down debt.

The measures announced late Thursday immediately follow an Adani Power decision to no longer pursue the planned acquisition of DB Power, which operates a 2x600 MW coal-based power plant in Chhattisgarh.

Adani Group's key executives also gave further updates on the financials and said that the results for the nine-month period ended December as well as during the December quarter were "excellent" from a portfolio perspective.

Adani has continued to engage in discussions with index provider MSCI and with various credit rating agencies, such as Sustainalytics and Moody's, and the management told investors Thursday that all companies were on track to retain their "relative scores".