How Adani Group plans to repay $1.9 billion to bondholders

the group told investors that the company will fully redeem the bonds sold by Adani Greens’ holding company, utilizing a $675 million funding letter furnished by the bond’s underwriters

With $1.9 billion in foreign currency bonds maturing next year, the Adani Group is drawing up plans to meet repayments through a mix of cash payments and refinancing through new bond sales.

The group told investors through regulatory filings that it is working to create a liquidity pool of cash and cash equivalents to repay $750 million of Adani Green’s holding company bonds sold in 2019 and maturing in September next year. The group has also committed to pay in cash a $650 million bond tranche of Adani Ports and Special Economic Zones (APSEZ) due by July, of which it has already paid $325 million in cash this year.

The group has begun talks with lenders to raise $410 million for refinancing Adani Green’s $500 million bond tranche maturing in May.

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While the Adani group did not respond to requests for comment, sources said, the group has begun discussions with potential investors to raise long-term funding extending up to 20 years in some instances.

“The group feels that investors’ confidence in the group has improved considerably in the past few months given the robust performances of the issuing companies and, therefore, refinancing the outstanding bonds will not be a problem,” a person aware of the discussion told Moneycontrol.

According to data compiled by Bloomberg, the conglomerate’s subsidiaries currently have approximately $7.5 billion in outstanding bonds. Analysts said that compared to holding companies, refinancing is typically easier in cash-flow-generating operating companies, and this might be the Adani group’s repayment strategy.

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Recently, the group told investors that the company will fully redeem the bonds sold by Adani Greens’ holding company, utilizing a $675 million funding letter furnished by the bond’s underwriters.

On Tuesday, APSEZ announced plans to raise Rs 5,000 crore through the sale of non-convertible debentures and an additional Rs 250 crore via non-cumulative redeemable preference shares. The company operates 13 ports and terminals across India, including the largest container handling port, Mundra, in Gujarat, and said that it plans to allocate a significant portion of the funds raised for refinancing existing debt.

In a December 10 report, Bloomberg said a recent rally erased losses on a set of Adani group dollar bonds. These bonds had declined after allegations of fraud were made by US-based short seller Hindenburg Research.

Additionally, the group has secured a $553 million loan from the International Development Finance Corporation for a container terminal in Sri Lanka.