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In the wake of allegations by American short-seller Hindenburg, which led to a significant erosion of wealth, the Adani Group is now on the cusp of finalizing a $3.5 billion loan for refinancing the debt incurred during the acquisition of Ambuja Cements Limited. Several banks and financial institutions have reportedly expressed their commitment to extending this loan, signaling a growing confidence in the financial stability of the conglomerate.
This deal, expected to be concluded this week, is projected to be one of the ten largest loans in Asia for the year, according to undisclosed sources cited by Bloomberg. The loan is expected to be priced at 450-500 basis points all-in-costs over the benchmark secured overnight finance rate.
The Adani Group has secured the support of 18 global banks, including prominent names such as Barclays, Deutsche Bank, and Standard Chartered, for this debt refinancing initiative, as reported by The Economic Times. Under the terms of the loan agreement, the Gautam Adani family, who are the promoters of the Adani Group, will prepay $300 million.
The move to refinance is forecasted to result in savings of approximately a quarter of a billion dollars over a three-year period, as per ET. Notably, the Adani Group has already repaid nearly $2 billion in loans associated with Ambuja and ACC. The roster of lenders involved in the deal comprises renowned institutions like MUFG, Mizuho, SMBC, DBS, First Abu Dhabi Bank, Standard Chartered Bank, Barclays, Deutsche Bank, ING, BNP Paribas, and Qatar’s QNB.
Reports suggest that the disbursement of the loan will commence in the coming week. Furthermore, this loan extension has effectively pushed the repayment timeline to 2027. In addition to reducing borrowing costs, this strategic move is poised to bolster the credit ratings of the Adani Group.
Gautam Adani, who held the title of India’s wealthiest individual earlier this year, experienced a significant decline in wealth following allegations of stock manipulation by Hindenburg. In the weeks that followed, his net worth plummeted to $40 billion due to a downturn in the stock market.
However, in recent months, Adani has managed to reclaim a substantial portion of his lost wealth, thanks to investments made by Indian-American investor Rajiv Jain in Adani Group’s stocks and other restorative measures that have instilled confidence among investors. According to Forbes, Gautam Adani’s current net worth stands at $52.8 billion.”
