Bloomberg: Adani Pledges to Tackle Debt Deadlines

Indian conglomerate Adani Group is planning to tackle its debt load. A number of the group’s bonds are now in junk territory following the report from US short seller Hindenburg Research. Annabelle Droulers reports on Bloomberg Television.
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Transcript

Well, what are we hearing? Yeah, what? Sure. This has been a really big issue for investors over the past few weeks, of course, since that short selling report, as you say, because we didn’t have the report early this week, Adani Group saying that its total debt stood somewhere around that 27 billion

Dollar mark. So the question really coming through is, how is Adani Group going to be managing that debt pile? Now we hear that executives have held yet another meeting with investors to try and reinsure them. And this one focused on Adani green energy and its bonds that are due in 2024.

So we understand that it could come up with a plan to refinance those by the end of June of this year and that this sparked a huge rally in the bonds. You can see on the screen rising around 10 cents. That is their biggest daily rise since September 20, 21.

And that was the point at which they were issued. So where Adani is looking to tap this financing, from what we understand, it could actually end up coming from private placements instead. So a note to most likely with the potential maturity of 15 years.

That’s what we’ve heard from sources. Essentially, the issue here or what Adani Group is trying to do is for Adani Group Energy is to try and cut the ratio of net debt to earnings before interest taxes, other other discounts as well to below three times next year. The current level, Heidi, is around

Three point two times. They’re also gonna have to manage higher funding costs. Yeah, this is gonna be a pretty thorny issue because we have already seen a number of Adani notes falling into junk territory. And then you also have other issues as

Well, because we have generally issues with yields spiking and then access to overseas financing because investors are now turning very wary as well. So this has made it really vulnerable Adani Group here, especially because it has been on a huge borrowing blitz over the last number of years, taking around

8 billion dollars from international bond buyers. You can see here how much it’s become more reliant on global banks financing around 18 per cent of their needs. That is up from just the single digits just around six or eight years ago. So a huge increase here coming from

Global banks. That is also going to have an issue when you have Adani Group not able to absorb. That’s what some investors are saying, these high interest rates that are coming through globally. So as investors say, Adani Group is going to have to be working for a quite

A significant amount of time now to try to restore investor confidence. Investors are very wary of any sort of transparency, governance issues at companies. We do understand as well that Adani is setting up meetings to try and reassure fixed income investors.

As we heard, those are supposed to start according to sources, from Thursday. So it perhaps already underway.

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