Adani Group: Adani refinances two dollar bonds, prepayment of stock awards

Jugeshinder ‘Robbie’ Singh, Adani Group’s chief financial officer, and Anupam Misra, head of group corporate finance, told investors they are working on a “full financing plan” to complete Adani Green’s $750 million 4.375-percent bond issue Energy refinance, which matures in September 2024 one year ahead of maturity.

The infrastructure conglomerate also plans to fully fund Adani Green Energy’s $460 million Group 1 restricted notes due December 2024 with 15-year fully amortizing privately placed notes, management told investors with. “Discussions are at an advanced stage and will be concluded shortly,” Singh said during the late evening call.

Additionally, Adani plans to prepay all loans in full for shares over the next 20 days to ensure post-debt repayment borrowing is not pegged to share value, potentially triggering margin calls.

Aims to reduce net debt/Ebitda to under 3x
Certainly the Adani Group repaid $1.1 billion worth of loans against its shares last week. These coordinated actions, aimed at restoring investor confidence, follow allegations of financial fraud, mismanagement and stock price manipulation by US short seller Hindenburg Research late last month. The conglomerate has since lost more than $120 billion in market cap, with several stocks continuing to hit their daily allowed floors.

Adani Group has denied the short seller’s allegations.

On Thursday, Adani management also reassured investors that the funding plan for the $750 million bond will be ready by the end of June this year as it is one of the “lowest rated and most volatile” issues listed face the market. This bond is trading at yields of 15-16%, up from 10% on Jan. 25 when the Hindenburg report was released.

The group will also seek to repay $390 million in loans from Adani Transmission using free cash flow or a committed plan. Aside from those three maturities, Adani has no major issuer repayment obligations until 2026-27, Singh said.

Adani will continue the deleveraging plan and will seek to reduce its net debt to EBITDA (operating profit) ratio from 3.2x to below multiples of 3 for its entire portfolio over the next year. It will cut discretionary capital spending to deleverage.

The measures announced late Thursday follow a decision by Adani Power not to pursue its proposed acquisition of DB Power, which operates a 2x600MW coal-fired power station in Chhattisgarh.

Adani Group’s key executives also provided further updates on the financial data, saying that the results for the nine-month period ended December and for the December quarter were “excellent” from a portfolio perspective.

Adani has continued discussions with index provider MSCI and with various rating agencies including Sustainalytics and Moody’s, and management told investors on Thursday that all companies are on track to maintain their “relative ratings”.