Gautam Adani's next milestone is plan for $1.25 billion of green arm debt

By Saikat Das and Abhinav Ramnarayan

Indian billionaire Gautam Adani’s conglomerate is set to shed light on its plans for $1.25 billion of Adani Green Energy Ltd. notes that come due next year.
 

The group, whose interests stretch from ports to solar energy and coal, is expected to come up with the first blueprints for redeeming or rolling over its overseas bonds since the scathing fraud claims by shortseller Hindenburg Research.That’s because the contractual documents of two Adani Green securities require several months advance notice. In one case, the deadline for a refinancing plan is on Friday. 

“We are coming close to timelines where we would like to see a concrete and definitive plan” Abhishek Dangra, a Singapore-based infrastructure analyst at S&P Global said. 

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While there have been no suggestions Adani won’t meet the deadlines and the conglomerate even pre-paid debt this year, its finances are under scrutiny after Hindenburg’s allegations of malfeasance triggered a spike in its dollar bond yields. Adani relies on the global market for 80% of its debt raising, according to its chief financial officer. The group denied all of Hindenburg’s claims and called them “bogus.”

The group and its bankers have begun exploratory talks about financing plans, according to people with knowledge of the matter, who asked not to be named because the discussions are private. The group is exploring multiple options for the Adani Green bonds due in 2024, such as refinancing them with new notes or taking out a loan, they said
 

The first note to come due in 2024 is one by Adani Ports and Special Economic Zone Ltd., while debt issued by Green matures on Sept. 8. That bond requires a roadmap be submitted nine months ahead of the date of maturity. That’s on Friday. 

The security sold by Green and its subsidiaries due on Dec. 10 mandates a finance plan be submitted to noteholders at least 12 months and one day in advance of the due date, according to the offering circular seen by Bloomberg. That deadline would be on Saturday. 

A spokesman for Adani did note respond when asked by Bloomberg about plans for the maturing bonds and whether investors had been informed of them. The representative also didn’t comment on the talks with bankers. 

While S&P doesn’t rate Adani Green, it does rate the December 2024 debt issued by its subsidiary companies under the Adani Green Restricted Group 1 umbrella. Dangra, the analyst, said the Ports business had enough cash on hand and a healthy cash flow so as to redeem its 2024 bond from its own funds.

 

Group CFO Jugeshinder Singh already touched on the conglomerate’s objectives, saying at an event in Mumbai on Dec. 1 that Adani Green would be one of the firms issuing dollar bonds over the next year. The group will also infuse money to repay that unit’s bonds maturing in September and December next year, potentially in July to avoid a prepayment penalty, Singh said.

He also told reporters on Friday that the Adani Green December bond “is the one we need to refinance.” When asked about the September bond, he said a refinancing plan had been announced in July, without elaborating. 

The Adani Ports debt will be redeemed “out of its cash,” he said.

The company spokesman didn’t respond to Bloomberg’s request for clarifications on the CFO’s remarks, including details on the refinancing plan announced in July. 

Having been forced to shelve a $2.5 billion share sale as a result of allegations of fraud and malfeasance levied by Hindenburg Research in late January, Adani and his lieutenants have sought to burnish their image as reliable borrowers. 

They prepaid debt, held in-person meetings from Hong Kong to London to reassure investors, and spent hundreds of millions of dollars buying back the debt of units including Adani Electricity Mumbai Ltd. and Adani Ports. 

Adani successfully refinanced the debt to purchase Ambuja Cements Ltd. and ACC Ltd., and it also won fresh equity capital from GQG Partners LLC. 

Just this week, Adani Green Energy raised a $1.4 billion loan for a renewable energy project in Gujarat. Its shares surged by a record 20% in a single day on the news. 

“The group has demonstrated access to equity funding,” Dangra said. “We have seen external lenders extending credit lines. We now have to see capital market access - that is the next step.”