Adani gets $3.5 bn loan to refinance cement buyouts

livemint.com:

Ambuja Cements Ltd and ACC Ltd. The refinancing deal, whose terms are more favourable than the original acquisition loan, has a maturity of up to three years. An Adani group special purpose vehicle called Endeavour Trade and Investment Ltd will avail the refinance amount.

According to the group, the refinance terms may save it around $300 million compared with the costs involved in the original loan. On 11 October, Mint reported that the Adani group had entered into a $3.7 billion refinance agreement with a consortium of banks, the largest such deal in the cement industry. The 10 global banks in the refinancing deal include DBS Bank, First Abu Dhabi Bank, Mizuho Bank, and MUFG Bank as mandated lead arrangers, bookrunners and underwriters.

In addition, Barclays Bank Plc, BNP Paribas, Deutsche Bank AG, ING Bank, Sumitomo Mitsui Banking Corp., and Standard Chartered Bank have come in as joint lenders. The refinance deal, apart from saving the group on costs, may enhance its credit rating and strengthen its ability for brownfield expansion. This is in line with its aspiration to beat its only bigger cement rival Ultratech Cement Ltd by doubling capacity from 70 million tonnes per annum (mtpa) now to 140 mtpa by 2027.

The latest refinance is part of the group’s bigger strategy to deleverage Adani’s cement business in a phased manner. The cement business’s leverage ratio (net debt to Ebitda ratio) is now less than two times, the company said in a release. In August 2022, Adani group acquired Ambuja Cements and ACC for over $6.5 billion, of which $2 billion was financed via equity and the rest through debt.