Months after facing erosion of wealth following American short-seller Hindenburg’s allegations, Adani Group is closing in on a $3.5 billion loan to refinance existing debt taken to purchase Ambuja Cements Limited. A clutch of banks and financial institutions have reportedly agreed to extend the loan, showing signs of boost in confidence among creditors in the conglomerate’s financial stability.
The deal, which could be sealed this week, will be among the 10 biggest loans in Asia this year, Bloomberg reported, quoting anonymous sources.
The agency added the loan would likely be priced at 450-500 basis points all-in-costs over the benchmark secured overnight finance rate.
18 global banks, including Barclays, Deutsche Bank and Standard Chartered, are in agreement with the group for refinancing the debt, reported The Economic Times.
The Adani Group’s promoter, the Gautam Adani family will have to prepay 300 million dollars, per the loan agreement.
The refinancing will help save about a quarter of a billion dollars over a period of three years, ET reported.
The Adani Group has repaid close to 2 billion dollars in Ambuja and ACC loans.
The 18 lenders include MUFG, Mizuho, SMBC, DBS, First Abu Dhabi Bank, Standard Chartered Bank, Barclays, Deutsche Bank, ING, BNP Paribas, and Qatar’s QNB.
The disbursals of the loan will start next week, it reported.
This loan has pushed the repayment timeline to 2027. Apart from saving borrowing costs, the exercise will also boost Adani Group’s credit ratings.
Gautam Adani was India’s richest person earlier this year when Hindenburg accused his conglomerate of stock manipulation. Within weeks of the allegations, his net worth plummeted to 40 billion dollars following a rout on the stock markets.
Over the last few months, Adani has recovered some of his lost wealth due to the infusion of funds by Indian-American investor Rajiv Jain in Adani Group’s stocks and other emergency measures that inspired investor confidence. Adani’s current net worth, according to Forbes, is 52.8 billion dollars.