India: Adani to prepay $1.11 billion loans on shares, denies report on capex cut

Group plans to trim its capital spending while providing more collateral in the form of stock pledges to lenders

Photo: AFP

By Reuters

Published: Mon 6 Feb 2023, 6:48 PM

Last updated: Mon 6 Feb 2023, 7:29 PM

India’s Adani Group on Monday said shares related to some group companies will be released following the pre-payment of $1.11 billion of loans ahead of their maturity in 2024 while denying media reports that said the conglomerate was planning to cut back its capital spending.

With the pre-payment of loans against shares, promoter holdings of 12 per cent in Adani Ports and Special Economic Zone Ltd , three per cent in Adani Green Energy Ltd and 1.4 per cent in Adani Transmission Ltd will be released, the embattled group said in a statement.

The loan pre-payment is “in light of recent market volatility and in continuation of the promoters’ commitment to reduce the overall promoter leverage,” the group said.

Adani Group plans to trim its capital spending while providing more collateral in the form of stock pledges to lenders, Indian newspaper Mint said, citing people close to the development.

“False report, on the contrary, Adani Group is moving to prepay all LAS (Loans Against Shares) finance,” a spokesperson for the group said in a separate emailed statement to Reuters.

The group’s domestic lenders do not plan to cut off the conglomerate from utilising sanctioned but unused credit lines for fears it could backfire and lead to defaults, Mint said in a separate report, citing bankers.

In the brutal fallout of Hindenburg’s report, investors dumped Adani shares, while the group’s flagship company, Adani Enterprises, was forced to abandon a $2.5 billion share sale last week. Meanwhile, Group Chairman Gautam Adani lost his title as Asia’s richest person and slipped down the global rankings of the wealthy.

Shares of Adani Group companies have lost more than half their market value, topping a cumulative $110 billion, after US short-seller Hindenburg Research last month raised questions about the group’s debt levels and use of tax havens.