Adani Group nearing $3.5 bn loan deal to refinance debt for Ambuja Cements: Reports
New Delhi, October 20: The Adani Group is in the final stages of securing a $3.5 billion loan to refinance existing debt incurred during the acquisition of Ambuja Cements Limited. This development marks a significant move after the conglomerate experienced a wealth erosion episode due to allegations made by American short-seller Hindenburg. The loan is expected to be one of the top 10 largest loans in Asia this year, indicating growing confidence among creditors in the Adani Group's financial stability.
The loan deal is anticipated to be concluded this week, as reported by Bloomberg, with estimated costs likely to range from 450 to 500 basis points above the benchmark secured overnight finance rate.
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A group of 18 global banks, including Barclays, Deutsche Bank, and Standard Chartered, have agreed to participate in refinancing the debt, according to The Economic Times. As per the loan agreement, the Gautam Adani family, the promoters of the Adani Group, will be required to prepay $300 million.
This refinancing initiative is expected to result in savings of approximately a quarter of a billion dollars over a span of three years, as reported by ET. The Adani Group has already repaid nearly $2 billion in Ambuja and ACC loans.
The 18 lenders involved in this loan arrangement encompass major institutions such as MUFG, Mizuho, SMBC, DBS, First Abu Dhabi Bank, Standard Chartered Bank, Barclays, Deutsche Bank, ING, BNP Paribas, and Qatar’s QNB. The disbursal of the loan is set to commence next week.
This loan extension has extended the repayment timeline to 2027, offering not only cost savings but also an enhancement of the Adani Group's credit ratings.
Earlier this year, Gautam Adani was India's wealthiest individual until Hindenburg accused his conglomerate of stock manipulation. Following the allegations, his net worth experienced a significant decline, dropping to $40 billion amid a stock market downturn.
In recent months, Adani has managed to regain a portion of his lost wealth, thanks to an infusion of funds by Indian-American investor Rajiv Jain into Adani Group's stocks and other strategic measures that instilled investor confidence. According to Forbes, Adani's current net worth stands at $52.8 billion.
- With inputs from agencies
