The Adani Group intends to buy back $650 million in foreign bonds at APSEZ.
The Adani Group intends to buy back $650 million in foreign bonds at APSEZ : According to estimates, term loans from foreign and Indian banks come in second to foreign currency bonds as the largest exposure to the Adani Group’s overall debt, at 39%.
According to two persons with knowledge of the ongoing discussions, the billionaire Gautam Adani-led Adani Group intends to use extra cash and internal accruals to repurchase foreign currency bonds issued by several group firms, according to a story in the Economic Times. The first acquisition will take place at Adani Ports and Special Economic Zone (APSEZ), according to the story, in a $650 million tranche.
The American short seller Hindenburg Research produced a report in January of this year accusing the business of illegally depositing money in offshore accounts, stock manipulation, and raising concerns about the group’s debt levels. This prompted questions about the Indian conglomerate’s excessive leverage.
According to estimates, term loans from foreign and Indian banks come in second to foreign currency bonds as the largest exposure to the Adani Group’s overall debt, at 39%.
In an exchange filing on Saturday, APSEZ stated that its board has approved a tender offer for its outstanding senior notes due 2024 in one or more tranches at the meeting held on April 22, 2023.
The group is also assessing bond buyback opportunities at other entities in an effort to increase investor confidence globally, according to the sources cited in the ET report, and it may soon finalise a capital allocation plan.
The time, specific conditions, and terms of the buyback will be decided by the finance committee with approval from the board of the firm.
According to the report, the company will probably start the buyback with a first tranche of $250 million to $300 million in the current quarter and look to buy back the remaining amounts in the following quarters.
According to a person with direct knowledge of the situation, “The group plans to eventually buy back the entire $650 million tranche through internal accruals and cash on the books,” ET reported.
For the first nine months of FY23, APSEZ reported revenues of Rs 15,055 crore and an operating profit of Rs 7,676 crore, according to the most recent corporate filings. In FY22, the company had a cash balance of Rs 10,492 crore.
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