Adani Ports announces first bond buyback since short seller attack

Indian tycoon Gautam Adani’s logistics unit has introduced it should purchase again as much as $650mn in bonds, as his conglomerate fights to show it has ample money available after a brief vendor assault three months in the past.

New York-based Hindenburg Analysis alleged in a January report that the ports-to-power conglomerate was manipulating its inventory value and engaged in fraudulent accounting. The assault wiped greater than $100bn off the group’s market worth and prompted credit score companies to downgrade their outlook on some Adani bonds.

Though the Adani group strenuously denied Hindenburg’s allegations, it pledged to slim its ballooning debt pile and sluggish its fast growth. Adani paid again $2.65bn of share-backed loans by mid-March, however that is its first bond buyback for the reason that Hindenburg report.

Adani Ports and Particular Financial Zone, the group’s ports and logistics division, will start by shopping for as much as $130mn of senior debt due in July 2024. After that tender supply is accomplished, it stated it supposed to buy the same quantity for 4 successive quarters, mopping up the bond’s whole excellent principal of $650mn.

The dollar-denominated bond carries a coupon of three.375 per cent. It has gained 1.7 per cent up to now 10 days and is now priced at 94.4 cents on the greenback. Adani Ports shares rose 1 per cent on Monday.

The buyback “is to partially pre-pay the corporate’s near-term debt maturities and to convey the comfy liquidity place of the corporate”, Adani Ports stated in a press launch, including it could fund the purchases from its money reserves.

The bond buyback “ought to assist enhance market sentiment”, wrote Eric Liu, an analyst at Japanese financial institution Nomura.

Liu added that “ESG issues stay on the desk” and that Adani Ports ought to commerce at a “significant differential” in contrast with equally rated Indian corporations.

Adani Ports chief government Karan Adani, Gautam Adani’s eldest son, stated in February that the corporate would halve its capital expenditure and settle money owed price Rs50bn (about $610mn) within the 2024 monetary 12 months, which started in April. As of March, he stated Adani Ports internet debt was Rs440bn ($5.4bn).

Adani Ports’ finance committee authorised the buyback plan at a 4am Monday assembly India time, based on inventory change filings. The logistics powerhouse is India’s largest by quantity and controls ports throughout the nation and so far as Israel.

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