File photo of billionaire Gautam Adani | Photo Credit: Reuters
The promoter group led by billionaire Gautam Adani has paid all the $2.15 billion Loan against pledge of own shares Only debt remains at the group, and operating company level, Adani Group said as it sought to reassure investors debt servicing ability,
In a statement, the Adani Group termed as “baseless and deliberately mischievous” the reports of the group not completing the repayment of a $2.15 billion share-backed loan. “Adani has completed the full prepayment of the margin linked equity-backed financing of USD 2.15 billion (as announced on March 12) and has released all relevant shares pledged against those facilities is,” it said.
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While “all the share-backed facilities availed by the promoters have been repaid”, the remaining pledges pertain to loans taken by the operating companies, it said.
“After such repayment, the pledge position for Adani Green, Adani Ports, Adani Transmission and Adani Enterprises has reduced significantly, and only the residual share pledge is outstanding for the operating company (OPCO) facilities,” it said.
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Opco loans are availed by related companies and are part of their existing debt structures, and no new Opco facilities have been availed since the January 24 disastrous report of US short-sellers.
The statement followed, citing exchange filings saying that banks do not issue a substantial portion of promoters’ shares as collateral, to suggest that loans have not been fully repaid.
Adani said that Opco secured various facilities on the basis of security of project assets, project cash flows and other such collateral. “In addition to such security, listed shares have been provided as additional collateral for these OpCo liabilities for additional lender comfort. Such facilities do not contain covenants such as cash margin calls, share price linked put options, etc. Those shares are present in backed financing.” The group said on February 6 that it had repaid $1.114 billion in debt, followed by a prepayment of $134 million. On 7 March it said that ₹7,374 crore ($902 million) had been paid. A consolidated number of $2.15 billion was released on 12 March.
Subsequently, on March 2, founder and chairman Gautam Adani sold shares worth $1.87 billion in flagship incubating firms Adani Enterprises Ltd, Adani Ports and Special Economic Zone Ltd, Adani Transmission and Adani Green Energy Ltd (AGEL) to GQG Partners in an attempt to sell . Narrative building since the release of the Hindenburg Research Report.
Adani Group’s 10 Listed CompaniesWhich together lost about $135 billion in market value after the report, after which shares saw a recovery of some lost ground.
In September last year, CreditSights, a unit of the Fitch Group, said the group was “over depth” as it expanded a portfolio focused on ports and coal mining to include airports, data centers and cement as well as green energy. Debt was used to expand the empire.
In a January 24 report, Hindenburg flagged “substantial” debt levels in the group, alleging accounting fraud and the use of offshore shell companies to inflate stock prices.
The group denied all of Hindenburg’s allegations.called them “malicious”, “baseless” and a “well-planned attack on India”.
Adani Group is hoping to turn the narrative around by choosing slow and steady growth over the breakneck, mostly debt-fuelled, expansion spree in recent years.
It has already canceled a ₹7,000-crore coal plant purchase, decided not to bid for a stake in state-backed energy trading firm PTC, reined in expenses, repaid some debt and promised more Have done
Adani Group’s gross debt has doubled in the last four years. About $2 billion worth of foreign currency bonds are coming up for repayment in 2024, according to its regulatory filing.
The group’s gross debt is set to grow from ₹1.11 lakh crore in 2019 to ₹2.21 lakh crore in 2023, according to a presentation made to investors last month.
After including the cash, the net debt stood at Rs 1.89 lakh crore in 2023.