Adani Cements, the holding company of Adani Group’s cement firms, is looking to restructure its $4.5-billion debt incurred for the acquisition of Switzerland-based Holcim Group’s stake in ACC and Ambuja Cements. The firm intends to complete the refinancing of the debt this month.
“The idea is to lower the interest rate of the debt, and Adani Group is in advanced stages of discussions with a clutch of domestic and global lenders for the restructuring exercise. These include existing lenders, both domestic and global, and new ones,” a source close to the development told FE.
The $4.5-billion debt is a short-term bridge capital with an 18-24-month tenure. This was provided by foreign banks – including Deutsche Bank, Barclays and Standard Chartered – and a number of European, Japanese and Indian banks.
The firm is now in talks with four European and three Japanese banks to refinance the debt, sources said.
The names of the banks could not be immediately ascertained.
In its largest-ever acquisition and India’s largest ever M&A transaction in the infrastructure and materials space, Adani Group had acquired Switzerland-based Holcim Group’s stake in Ambuja Cements and ACC in September last year for $6.5 billion in cash. Holcim, through its subsidiaries, had held a 63.19% stake in Ambuja Cements and a 54.53% in ACC (of which 50.05% was held through Ambuja Cements).
Of the total $6.5 billion, $2 billion was funded through equity.
Following the acquisition, the group announced plans to double cement production capacity to 140 MTPA by FY28 with an investment of Rs 46,000 crore.
The Adani Group is in various stages of fund-raising for its group firms, including its flagship company Adani Enterprises (AEL), and it had received assurances of financial support from global banks. Earlier, certain Japanese banks, including Mitsubishi UFJ Financial Group, Sumitomo Mitsui Banking and Mizuho Financial Group, who were not lenders to the group earlier, had also assured of their cooperation.
The banks had pledged support to refinance bonds maturing in FY24 and FY26, and existing and new debt. Adani Group has $4 billion of bonds maturing in FY24 and FY26.
Adani Group companies are executing large-scale projects across infrastructure and utility space, and need cash flows for these, and a series of expansion plans, including adding capacity at its cement business, are also on the anvil.
The group’s debt as of March 31, 2023, stood at Rs 2.27 trillion, of which 39% was in bonds, 29% loans from international banks and 32% with Indian banks and NBFCs. The gross value of the group’s assets was at Rs 3.91 trillion.