Adani Group seeks to enlist additional lenders for a $3.8 billion refinancing
Tuesday, 20 June 2023, 10:12 IST
The Adani Group is in discussions to rope in at least five new international banks as it looks to refinance $3.8 billion of loans of varying tenors taken for the acquisition of ACC Limited and Ambuja Cement last year, said people aware of the ongoing discussions.
According to these people, the majority of Adani's existing lenders, including the lead banks Standard Chartered, Barclays and Deutsche Bank - will participate in the refinancing round. The group has also begun discussions with two Taiwanese banks and a Malaysian bank among others to expand the consortium of lenders to syndicate the above loan, which will likely entail extension of the payment tenor by three years. "The meetings with lenders are currently underway and the group is targeting mid-July to stitch up a loan agreement with the consortium," said a person aware of the discussion.
As things stand, the existing lenders are by and large comfortable to rework the terms of the loan but have asked the group to bring more lenders into the consortium to avoid concentration risk for the existing lenders, said the person. "Bringing in new lenders will also boost the group's credit worthiness perception, especially when the group taps overseas bond markets sometime later this year," said person aware of the discussion.
The first repayment tranche of the aforesaid loans is due in February 2024. A report on stated that the Adani Group was seeking to renegotiate the terms of outstanding loans of around $4 billion taken in August last year for the acquisition of its cement assets ACC and Ambuja Cements from Switzerland-based Holcim group. Also the report said that the group was looking to extend the tenor of its $3 billion bridge from the existing 18 months to a period of five years.
Simultaneously, the group is also seeking to convert another $1 billion mezzanine loan tranche, which has a maturity of 24 months currently, to senior secured debt with a repayment schedule extending up to five years. Although buyers of Indian corporate loans have been in the secondary loan market for a long time, Taiwanese banks have increased presence in primary deals too. In April, Reliance Industries and Reliance Jio Infocomm raised $2 billion from around 55 lenders, of which more than a dozen were Taiwanese banks.
According to these people, the majority of Adani's existing lenders, including the lead banks Standard Chartered, Barclays and Deutsche Bank - will participate in the refinancing round. The group has also begun discussions with two Taiwanese banks and a Malaysian bank among others to expand the consortium of lenders to syndicate the above loan, which will likely entail extension of the payment tenor by three years. "The meetings with lenders are currently underway and the group is targeting mid-July to stitch up a loan agreement with the consortium," said a person aware of the discussion.
As things stand, the existing lenders are by and large comfortable to rework the terms of the loan but have asked the group to bring more lenders into the consortium to avoid concentration risk for the existing lenders, said the person. "Bringing in new lenders will also boost the group's credit worthiness perception, especially when the group taps overseas bond markets sometime later this year," said person aware of the discussion.
The first repayment tranche of the aforesaid loans is due in February 2024. A report on stated that the Adani Group was seeking to renegotiate the terms of outstanding loans of around $4 billion taken in August last year for the acquisition of its cement assets ACC and Ambuja Cements from Switzerland-based Holcim group. Also the report said that the group was looking to extend the tenor of its $3 billion bridge from the existing 18 months to a period of five years.
Simultaneously, the group is also seeking to convert another $1 billion mezzanine loan tranche, which has a maturity of 24 months currently, to senior secured debt with a repayment schedule extending up to five years. Although buyers of Indian corporate loans have been in the secondary loan market for a long time, Taiwanese banks have increased presence in primary deals too. In April, Reliance Industries and Reliance Jio Infocomm raised $2 billion from around 55 lenders, of which more than a dozen were Taiwanese banks.
