New Delhi: According to reports, the Adani Group is seeking some more time to repay the debt associated with cement firms, Ambuja Cements and ACC. The Economic Times citing sources reports that the Gautam Adani-led firm is seeking to renegotiate the terms of the outstanding loans which are worth $4 billion.
The newspaper writes that the Adani Group had taken this loan in August last year from the Switzerland-based Holcim group. The group has started negotiations with lenders to extend the tenor of $3 billion bridge loan. It hopes this tenure can get extended to a period of five years or more, from the existing 18 months. The Economic Times reported that the Adani Group is also seeking to convert another $1 billion mezzanine loan tranche from the present repayment period of 24 months, to senior secured debt, which would extend the repayment schedule up to five years.
Reuters reports that shares of the Adani group tumbled during the day upon the publication of this news report. Reports say that “all 10 Adani Group stocks were trading lower on Tuesday with four of them, Adani Power, Adani Transmission, Adani Green and Adani Total Gas, locked in the 5% lower circuit limits.” The Adani Group is said to have been the “worst performer” in the market today.
Gautam Adani denies any wrongdoing, but the release of a report by Hindenburg Research in late January resulted in Adani stocks going into a tailspin and the group lost around $100 billion in market capitalisation. The Adani Group has denied all charges of wrongdoing and fraud.
Analyst Alam Srinivas writes that “the debt burden over Adani’s head will not vanish. A few experts feel that the group’s loan exposure is still high.” He terms this a “precarious debt situation, the group still requires a cash influx.” On the recent purchase of Adani stocks worth a whopping $1.9 billion in one day by GQG Partners, a US-based entity with assets under management of more than $90 billion, “GQG bought the shares from Adani’s personal kitty and not from the market, hence the purchases enabled Adani to reduce his holdings in the four companies.” This, writes the analyst “is vital, given one of the main charges by Hindenburg.”
The short-seller’s main charge is that it has traced entities in tax havens, “which held huge stakes in listed Adani firms, and were related to Gautam Adani’s brother, Vinod.” But as “these facts were not disclosed. In effect, the promoters’ stakes in several listed firms exceeded the legal limit of 75%.” If investigations find that these entities are related to Adani, it could spell trouble for the Adani group.