Adani Group Mulls Buy Back Of $650 Million Foreign Currency Bond At Adani Ports and Special Economic Zone

As per estimates, of the total debt of the Adani Group, foreign currency bonds constitute the highest exposure at 39 per cent, followed by term loans from foreign and Indian banks.

New Delhi: Billionaire Gautam Adani-led Adani Group is planning to utilise surplus cash and internal accruals to buy back foreign currency bonds of various group companies, reported Economic Times quoting two people aware of the ongoing discussions. The first such buy back would be a $650-million tranche at Adani Ports and Special Economic Zone (APSEZ), the report added.

The Indian conglomerate’s high leverage came under question after U.S.-based short seller Hindenburg Research in January this year published a report accusing the company of illegal parking of money in offshore accounts, stock manipulation, and raised concerns of the group’s debt levels.

As per estimates, of the total debt of the Adani Group, foreign currency bonds constitute the highest exposure at 39 per cent, followed by term loans from foreign and Indian banks.

APSEZ, in an exchange filing Saturday, said its board, at the meeting held on 22 April 2023, has approved a tender offer for its outstanding senior notes due 2024, in one or more tranches.

In an attempt to boost global investor confidence, the group is also evaluating bond buy back opportunities at other entities and may soon finalise a capital allocation plan, the sources mentioned in the ET report said.

The company’s board has authorised its finance committee to determine the timing, detailed terms, and conditions for the buyback. As per the report, the group will likely begin the buy back with a first tranche amounting to anywhere between $250 million and $300 million in the current quarter, and look to buy back the rest in the upcoming quarters.

“The group plans to eventually buy back the entire $650 million tranche through internal accruals and cash on the books,” ET said quoting a person directly aware of the matter.

As per the latest corporate filings, APSEZ reported revenues of Rs 15,055 crore, and an EBITDA, or operating profit, of Rs 7,676 crore for the first nine months of FY23. In FY22, the company had a cash balance of Rs 10,492 crore.