 "AdaniConneX in talks with banks to raise $900-950 mn in offshore loan")
AdaniConneX is in the last phase of negotiations to secure a six-year offshore loan totaling $900-950 million from a consortium of eight lenders.
The consortium of lenders includes MUFG Bank, Sumitomo Mitsui Banking Corp (SMBC), and the Standard Chartered Bank, according to a report in The Economic Times (ET).
The ET report said that the loan agreement is set to be signed this week.
The funding arrangement entails an interest rate set at 250-260 basis points above the Secured Overnight Financing Rate (SOFR) and spans a duration of six years. The SOFR is currently 5.3 per cent. The funds will be utilised to increase its data centre capacity.
AdaniConneX, a joint venture between Adani Enterprises and EdgeConneX, aims to establish 1 GW of data centre capacity across Hyderabad, Chennai, Noida, and Pune in the coming decade. As reported by ET last week, the company, which secured $213 million in funding last year, aims to raise $5 billion by 2030 for this project.
The other lenders in the loan syndicate are Societe Generale, Natixis, ING Bank, Intesa, and KfW.
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The ET cited a source as saying, “Adani got over commitment of $2 billion for the loan and is closing the debt at $900 million to $950 million.”
Last year, the company secured $213 million through a construction financing facility from ING Bank, Mizuho Bank, MUFG Bank, Natixis, Standard Chartered Bank, and SMBC.
This funding was designated to support the establishment of two data centres, collectively boasting a capacity of 67 MW: 17 MW at Phase 1 of its “Chennai 1” campus and 50 MW in Noida, the ET reported.
Ratings agency CRISIL projected that India’s data centre capacity will increase two-fold from approximately 870 MW in FY22 to 1,700-1,800 MW by FY25, according to the ET report.
In 2021, the Adani Group ventured into the data centre sector through a collaboration with Edge Connex. The conglomerate, known for its significant operations in ports and airports across India, aims to expand its presence in the data centre industry.
In March, it secured $409 million through 18-year US dollar notes issued by the Adani Green Energy Twenty-three Ltd, a joint venture equally owned by Adani Green Energy and TotalEnergies. The funding was obtained at a rate of 6.7 per cent.
In January this year, Adani Power said it has inked an initial pact to sell 100 per cent equity in its two arms Aviceda Infra Park and Innovant Buildwell to AdaniConnex for Rs 540 crore.
“Adani Power has entered into a Memorandum of Understanding (MOU) to sell its 100 per cent equity stake in its two wholly-owned subsidiaries i.e. Aviceda Infra Park Ltd (AIPL); and Innovant Buildwell Private Ltd (IBPL) to AdaniConnex Private Ltd (ACX)," the company had said in a BSE filing.