The Adani group is believed to have got an extension of 12-18 months for the repayment of the bank loans taken by it to fund its acquisition of ACC and Ambuja Cements, which it acquired last year for $6.5 billion.
Around August-September last year the company had borrowed $5.25 billion from 14 global banks to finance the acquisition of the two cement companies by buying out Holcim’s stake.
Read: Adanis pace up ACC-Ambuja integration to unlock synergies
The bulk of the loans amounting close to $4 billion had a repayment period of 18-24 months and were due in 2024. Sources indicated that repayments were now due in 2025-26. A shorter tenure component of $1.45 billion, were bridge loans. They have been repaid in three tranches - $750 million earlier, $500 million in March, and more recently $200 million as a prepayment.
The Adani Group did not respond to an email seeking clarification.
Crucial strategy
Repayment of the bridge loans, ahead of time, was a crucial strategy for the group to instil confidence among its lenders. The extension of the tenure gives the group breathing time to repay its debt obligations.
Sources indicated that even with the extension it would be endeavouring to prepay the loans as and when it could. This would be partly through internal accruals while it was also waiting for an opportune moment to raise funds by taking on a strategic investor.
Internal accruals are also the way the group plans to fund the expansion of its cement manufacturing capacities. At the end of FY23, the two cement companies together had cash and cash equivalents of ₹ 11,530 crore, up from ₹9,454 crore at the end of December.
Apart from the loans taken from banks to fund its acquisition, the group has a substantial burden of repayments in the form of bonds maturing over the next several years.
In January when short-seller hedge fund Hindenberg Research came out with its explosive report on the group alleging all kinds of regulatory violations and governance lapses the group has close to $10 billion worth of repayments to be made on its books.
Since then, it has made payments of $2 billion to redeem pledged shares, other smaller payments for maturing short-term debt such as commercial papers while it also raised about $1.9 billion by sale of stakes in some group companies to Rajiv Jain-owned growth equity firm GQG Partners.