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Business News/ Companies / News/  Adani repays $2.65 bn debt, releases Ambuja Cem share pledge

MUMBAI : Billionaire Gautam Adani has fully repaid $2.15 billion of margin-linked, share-backed funding before its target 31 March deadline, the company said on Sunday. Additionally, Adani also prepaid a $500 million loan facility for acquiring Ambuja Cements Ltd, taking the total prepayment by the Adani family to $2.65 billion.

“Adani continues to increase equity in Ambuja financing by prepaying $500 million as a commitment to reduce sponsor-level leverage," the group said in a late evening statement.

The Adani family, the promoters of the port-to-power conglomerate, has been on a debt-prepayment spree to slash the group’s leverage levels following a 24 January report by US-based short-seller Hindenburg Research that accused the group of stock manipulation and accounting fraud. The group has denied the allegations.

“In continuation of promoters’ commitment to repay the promoter leverage, Adani has completed full prepayment of margin linked share backed financing aggregating to $2.15 billion, well before the committed timeline of 31 March 2023," the statement said.

“In addition to the above, promoters have also prepaid a $500 million facility taken for Ambuja acquisition financing. This is in line with promoters’ commitment to increase equity contribution, and promoters have now infused $2.6 billion out of the total acquisition value of $6.6 billion for Ambuja and ACC cement. The entire prepayment programme of $2.65 billion has been completed within six weeks, which testifies to the strong liquidity management and access to capital at sponsor level, supplementing the solid capital prudency adopted at all portfolio companies," said the group statement.

On 10 March, the Financial Times newspaper reported that Gautam Adani is seeking to sell a stake in Ambuja Cement for about $450 million, citing people familiar with the matter.

A person close to the Adani group confirmed this to Mint.

The embattled Adani Group last year acquired Holcim AG’s cement businesses in India—Ambuja Cements and ACC Ltd—for $10.5 billion, its largest-ever acquisition.

Adani Group, which has witnessed a sharp fall in market capitalization following the Hindenburg Research report, is now seeking to rebuild investor confidence by prepaying loans.

On 7 March, Adani group said it has prepaid share-backed loans totalling 7,374 crore ahead of their maturity in April 2025, as the conglomerate aims to reduce promoter leverage.

The repayment to various international banks and Indian financial institutions released shares of four listed Adani companies from encumbrance.

Over the past month, the Adani family has paid off at least 20,000 crore of debts to lower the group’s leverage.

On Thursday, the SB Adani Family Trust, an Adani promoter group entity, sold between 2.5% and 4.1% of its holdings in Adani Enterprises, Adani Ports, Adani Green Energy, and Adani Transmission for 15,446 crore through a series of bulk deals to US-based GQG Partners.

However, it could not be ascertained immediately if Adani group is using the amount raised from GQG to prepay loans.

Adani Group shares plunged after Hindenburg Research report alleged accounting fraud and price manipulation against the conglomerate. This forced Adani Enterprises to withdraw its 20,000 crore follow-on public offering.

However, since the end of February, prices of Adani group firms began to recover and, from 2 March, gathered pace after GQG Partners picked up a stake worth $1.87 billion from the Adani Family Trust in Adani Enterprises, Adani Ports, Adani Green Energy and Adani Transmission.

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Anirudh Laskar
Anirudh Laskar is a senior editor at Mint, with 17 years of experience. He has reported on significant corporate matters including large mergers and acquisitions, India's emerging e-commerce sector and regulatory issues in the financial services industry. Based out of Mint’s Mumbai bureau, Anirudh has worked with Business Standard and The Telegraph before joining Mint in 2009.
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Updated: 12 Mar 2023, 11:37 PM IST
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