Adani Ports offers to buy back $195 mn of its 2024 dollar bond at discount

By Harry Suhartono

Adani Ports and Special Economic Zone Ltd. will buy back as much as $195 million of its notes due 2024 at a discount to their issue price, the Indian firm’s second tender offer for the notes in just a few months. 
 

The company, part of the conglomerate backed by billionaire Gautam Adani, said it would fund the purchase from its cash reserves, according to a statement on Wednesday. For debt tendered by Oct. 11, the firm will pay $975 for every $1,000 in principal. Thereafter the offer price drops to $965 per $1,000. 

“The purpose of the Tender Offer is to partly prepay the Company’s near-term debt maturities,” it said. 

The Adani group has been trying to rebuild investor confidence in recent months after a Hindenburg Research report alleging corporate malfeasance caused a selloff in its bonds and shares. Adani officials have repeatedly denied the allegations. 

Having plunged as low as 85.8 cents on the dollar in February after Hindenburg published its allegations, the notes have recovered and were trading at 96.4 cents on the dollar on Wednesday, Bloomberg-compiled prices show.

Bond buybacks allow companies to repurchase debt through tender offers to bondholders, enabling them to retire some or all of the securities ahead of their due date.

Adani’s announcement bucks the global trend. After interest rates rose sharply, companies have been repurchasing less debt. Keeping bonds with lower coupons for longer means they don’t have to take out more expensive new debt instead.

The bond due in July of next year has $520 million of outstanding principal, according to Bloomberg-compiled data. The tender offer expires at 5:00 p.m. in New York on Oct. 26.