Adani Group Unveils Blueprint For Timely Repayment Of $750 Mn Bond
The solar energy unit of Adani Group has revealed its first settlement plan for a USD 750 million bond that matures next year. This represents a continuous improvement in the bond's performance after a market decline earlier this year.
In a report to the Singapore stock exchange, Adani Green Energy, a division of Gautam Adani's conglomerate, pledged to fully redeem the notes by the September 8 deadline.
The bond's underwriters will provide a USD 675 million funding letter to enable the redemption, and the business will use the profits from equity transactions to increase the repayment fund.
Although USD 75.47 million in restricted reserves is mentioned in the filing, neither the funding letter's contents nor the source of the cash from the equity transaction are disclosed.
Despite the lack of specific details, the bond has continued its positive momentum for the fifth consecutive day, reaching its highest point since April 2022, based on data compiled by Bloomberg.
At 11:20 am Singapore time, the bond registered a 0.1 per cent increase on the dollar. Notably, nearly all of Adani Group's other US currency notes also experienced gains.
The financial affairs of Adani Group's diverse subsidiaries have garnered increased attention from investors following allegations of corporate fraud by US short-seller Hindenburg Research earlier this year. Although some of the group's dollar bonds have fully recovered, others still lag behind their pre-crisis levels.
Analyst Sharon Chen for Bloomberg Intelligence points out that unless the disclosed plan formally verifies the existence of pledged cash, concerns would not be fully alleviated. The Sept. 2024 bond, which is listed in Singapore, requires Adani Green to come up with a refinancing strategy nine months before the bond's maturity date.
The company's CFO, Phuntsok Wangyal, announced the establishment of a "liquidity pool" to pay back the notes during an earnings call earlier this year.
The Adani Group leadership has been proactive in restoring investor trust in the wake of Hindenburg's accusations.
The actions implemented comprise debt prepayment, in-person meetings with investors at various locations throughout the world, and sizeable debt repurchases for companies such as Adani Ports and Special Economic Zone and Adani Electricity Mumbai
Recently, Adani Green secured a USD 1.4 billion loan for a renewable energy project, contributing to a surge in the conglomerate's unit values and collectively boosting their market capitalization by USD 23 billion.
