Adani Group closes in on $3.5bn loan to restructure debt
The Adani Group is on the verge of securing a massive $3.5 billion (around Rs. 29,110 crore) loan to refinance its existing debt from the acquisition of Ambuja Cements Ltd. This deal, expected to be finalized this week, would be among the top 10 largest loans in Asia this year. Insiders reveal that the loan would likely have an all-in-cost of 450-500 basis points over the benchmark secured overnight finance rate and include three tenors: 6-month, 18-month, and 3-year.
Allegations of fraud and financial recovery
This refinancing move comes after months of talks with banks and follows fraud allegations against Adani Group by US short-seller Hindenburg Research earlier this year. These claims led to a significant drop in Adani's bonds and shares. However, the company has strongly denied these allegations. In July, Adani's flagship firm raised Rs. 1,250 crore by issuing local-currency bonds, aiming to move past the Hindenburg claims.
How will the loan impact Adani Group?
Obtaining this $3.5 billion loan would show a renewed trust in the Adani Group among creditors and help the conglomerate refinance its debt from the Ambuja Cements Ltd. acquisition. The loan could also highlight the group's ability to bounce back from the financial impact of Hindenburg Research's allegations.
Future prospects for Adani Group
With this potential loan in place, the Gautam Adani-led conglomerate can keep its focus on core businesses and expansion plans. The refinancing deal could offer the necessary financial support for the group to further solidify its position in various sectors, such as infrastructure, energy, and logistics, contributing to India's overall economic growth.
