[vc_row][vc_column][vc_column_text css=”.vc_custom_1678957058616{border-top-width: 1px !important;border-right-width: 1px !important;border-bottom-width: 1px !important;border-left-width: 1px !important;border-left-color: #000000 !important;border-left-style: solid !important;border-right-color: #000000 !important;border-right-style: solid !important;border-top-color: #000000 !important;border-top-style: solid !important;border-bottom-color: #000000 !important;border-bottom-style: solid !important;border-radius: 3px !important;}”]
Adani Group Debt Situation
[/vc_column_text][vc_separator css=”.vc_custom_1647339034936{margin-bottom: 30px !important;}”][vc_column_text css=”.vc_custom_1678966132598{margin-bottom: 15px !important;}”]After the Hindenberg Research report on Adani Group’s alleged misconduct came out, Adani Group was quick to respond to all allegations and tried their best to allay all investor fears. Since the report, Adani Group has come out with huge announcements regarding the path ahead for the conglomerate. The company is putting a hold on all upcoming merger and acquisition activities for at least 12 to 18 months, largely to give confidence to the investors and banks. The company instilled in the investors a sense that things are under control by assuring that all group companies will have sufficient free cash flow and cash envelope to take care of all bond maturities that are yet to arise starting 2024. Company assured that they will have a full-fledged finance plan available at least a year in advance for bond maturities in 2024 and will make sure that the redemption is either entirely cash based or a fully underwritten finance plan is in place.
Adani announced full prepayment of margin-linked share-backed financing worth $2.15 billion as part of its debt prepayment plan before its deadline of March 31. Other than the prepayment of $2.15 loan, the promoters have also prepaid a $500 million facility taken for Ambuja acquisition financing. The Group said, “The entire prepayment program of $2.65 billion has been completed within 6 weeks, which testifies to the strong liquidity management and access to capital at sponsor level, supplementing the solid capital prudence adopted at all portfolio companies”.
[/vc_column_text][vc_single_image image=”72950″ img_size=”large” css=”.vc_custom_1678959261879{margin-top: 20px !important;margin-right: 20px !important;margin-bottom: 20px !important;margin-left: 20px !important;}”][vc_single_image image=”72951″ img_size=”large” css=”.vc_custom_1678959271299{margin-top: 20px !important;margin-right: 20px !important;margin-bottom: 20px !important;margin-left: 20px !important;}”][vc_column_text css=”.vc_custom_1678968919453{margin-bottom: 15px !important;}”]Gross Assets to Net Debt is less than 2x, which is a hopeful sign. Net Debt / Run Rate EBITDA has also been falling over the years.
Let us look at individual companies debt service coverage ratio (DSCR) and the amount of debt that has to paid in the years to come.
Adani Ports and Special Economic Zone Ltd.
The DSCR, even though lesser than 2, has consistently remained above the baseline put in place by bond-holder covenants. The Group also generates enough cash flow to cover year debt discharge.[/vc_column_text][vc_single_image image=”72954″ img_size=”large” css=”.vc_custom_1678969069256{margin-top: 20px !important;margin-right: 20px !important;margin-bottom: 20px !important;margin-left: 20px !important;border-top-width: 1px !important;border-right-width: 1px !important;border-bottom-width: 1px !important;border-left-width: 1px !important;border-left-color: #000000 !important;border-left-style: solid !important;border-right-color: #000000 !important;border-right-style: solid !important;border-top-color: #000000 !important;border-top-style: solid !important;border-bottom-color: #000000 !important;border-bottom-style: solid !important;}”][vc_column_text css=”.vc_custom_1678967021955{margin-bottom: 15px !important;}”]Adani Green Energy Ltd.
DSCR is in a comfortable zone. The management has stated clearly that they will have a financing plan ready more than a year in advance of the FY2025 bond repayment.[/vc_column_text][vc_single_image image=”72955″ img_size=”large” css=”.vc_custom_1678969064906{margin-top: 20px !important;margin-right: 20px !important;margin-bottom: 20px !important;margin-left: 20px !important;border-top-width: 1px !important;border-right-width: 1px !important;border-bottom-width: 1px !important;border-left-width: 1px !important;border-left-color: #000000 !important;border-left-style: solid !important;border-right-color: #000000 !important;border-right-style: solid !important;border-top-color: #000000 !important;border-top-style: solid !important;border-bottom-color: #000000 !important;border-bottom-style: solid !important;}”][vc_column_text css=”.vc_custom_1678967072291{margin-bottom: 15px !important;}”]Adani Transmission Ltd.
DSCR is in a comfortable zone. Bond repayment obligation can be made via company generated free cash flow.[/vc_column_text][vc_single_image image=”72956″ img_size=”large” css=”.vc_custom_1678968980667{margin-top: 20px !important;margin-right: 20px !important;margin-bottom: 20px !important;margin-left: 20px !important;border-top-width: 1px !important;border-right-width: 1px !important;border-bottom-width: 1px !important;border-left-width: 1px !important;border-left-color: #000000 !important;border-left-style: solid !important;border-right-color: #000000 !important;border-right-style: solid !important;border-top-color: #000000 !important;border-top-style: solid !important;border-bottom-color: #000000 !important;border-bottom-style: solid !important;}”][vc_column_text css=”.vc_custom_1678967093852{margin-bottom: 15px !important;}”]Adani Total Gas Ltd.[/vc_column_text][vc_single_image image=”72957″ img_size=”large” css=”.vc_custom_1678968993370{margin-top: 20px !important;margin-right: 20px !important;margin-bottom: 20px !important;margin-left: 20px !important;border-top-width: 1px !important;border-right-width: 1px !important;border-bottom-width: 1px !important;border-left-width: 1px !important;border-left-color: #000000 !important;border-left-style: solid !important;border-right-color: #000000 !important;border-right-style: solid !important;border-top-color: #000000 !important;border-top-style: solid !important;border-bottom-color: #000000 !important;border-bottom-style: solid !important;}”][vc_column_text css=”.vc_custom_1678967113915{margin-bottom: 15px !important;}”]Adani Power Ltd.[/vc_column_text][vc_single_image image=”72958″ img_size=”large” css=”.vc_custom_1678969009403{margin-top: 20px !important;margin-right: 20px !important;margin-bottom: 20px !important;margin-left: 20px !important;border-top-width: 1px !important;border-right-width: 1px !important;border-bottom-width: 1px !important;border-left-width: 1px !important;border-left-color: #000000 !important;border-left-style: solid !important;border-right-color: #000000 !important;border-right-style: solid !important;border-top-color: #000000 !important;border-top-style: solid !important;border-bottom-color: #000000 !important;border-bottom-style: solid !important;}”][vc_column_text css=”.vc_custom_1678967126098{margin-bottom: 15px !important;}”]Adani Enterprise Ltd.[/vc_column_text][vc_single_image image=”72959″ img_size=”large” css=”.vc_custom_1678969022777{margin-top: 20px !important;margin-right: 20px !important;margin-bottom: 20px !important;margin-left: 20px !important;border-top-width: 1px !important;border-right-width: 1px !important;border-bottom-width: 1px !important;border-left-width: 1px !important;border-left-color: #000000 !important;border-left-style: solid !important;border-right-color: #000000 !important;border-right-style: solid !important;border-top-color: #000000 !important;border-top-style: solid !important;border-bottom-color: #000000 !important;border-bottom-style: solid !important;}”][vc_column_text css=”.vc_custom_1678959077631{margin-bottom: 15px !important;}”]The group CFO, Jugshinder Singh, mentioned on the fixed income investor call that whatever turbulence stakeholders are seeing in the market, his humble request to all is that there has not been in 30 years of Adani branded entity, a single missed payment of any type. He added, “..continuing work in relation to the three issuers, be it ports, be it transmission, be it green, is continuing and Adani Green will have over 8 GW of operating assets in March, which will further add one gigawatt of cash flow to the business, which all of that capital is already accounted for in terms of investments in the issues. All of the businesses combined, our joint venture relationships remain strong as usual. The data center with EdgeConneX going strong and partners fully committed, IHC our strategic partner, you heard their statement. I don’t have to repeat it. Wilmar, total, despite the fact what you might have read, continue to be fully engaged in processes. We have MOU on Adani New Industries, which is green hydrogen, that was going through its normal due diligence phase. It’s continuing its due diligence phase and we will see how that completes over the next two to three months or, or next six months.”[/vc_column_text][vc_zigzag][vc_column_text]
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