Adani bond rebound helps erase short seller hit: Credit Weekly
Adani of fraud.
The jump came after the group, which strenuously denies the allegations, raised $1.4 billion for a renewables project and published an initial blueprint for refinancing a solar-energy unit’s $750 million dollar bond that matures in September.
That was enough to also add a whopping $37.5 billion in market value to the group’s listed companies, while notes of the corporation’s electricity and power transmission businesses are now within striking distance of their price level before January’s report by Hindenburg Research.
The rebound suggests the conglomerate, once termed “deeply overleveraged” by research firm CreditSights, is finding favor with investors again. The group, whose operations range from cement to airports and coal mining, has yet to tap overseas bond markets since the January publication, which came at a time when rapidly rising US interest rates curbed offshore issuance by Asian companies.
Billionaire Adani has “clearly got some great assets and he’s clearly able to monetize those,” said Kamil Dimmich, a partner at London-based North of South Capital.
“He’s certainly been helped by the underlying businesses becoming more profitable.”
The conglomerate’s units have about $7.5 billion of dollar notes outstanding, according to data compiled by Bloomberg. About $1.58 billion of those notes come due next year, meaning the amount the firm has to pay for replacement debt will be closely watched.
It’s already successfully refinanced $3.5 billion worth of credit for the purchase of two cement companies.
As part of the road map for the green energy firm’s bond, the firm said bankers will provide it with a $675 million funding letter in relation to the notes and it will use proceeds from equity
