Shares of Adani Group companies tumbled again on Tuesday after a report said the conglomerate was seeking to renegotiate terms of outstanding loans worth $4 billion.
The group took out the loans last year to buy cement firms ACC and Ambuja Cements.
The group’s flagship firm, Adani Enterprises, slid nearly 7% to a near four-week low, while Adani Ports tumbled more than 5%. Meanwhile, ACC dropped 4.5% to its lowest since February 2021 and Ambuja Cements slipped nearly 3%.
The group, led by billionaire Gautam Adani, has begun negotiations with lenders to extend the tenure of its $3 billion bridge loan to a period of five years or beyond from the existing 18 months, the Economic Times reported on Tuesday, citing sources.
The group is also reportedly seeking conversion of another $1 billion mezzanine loan tranche, which currently has a maturity of 24 months, to senior secured debt with a repayment schedule extending up to five years.
The original plan was to refinance a large portion of the loans via long-term bonds but that looks difficult given the current market conditions, the newspaper cited a banker as saying.
The Adani Group and lenders Standard Chartered, Barclays and Deutsche Bank did not immediately respond to Reuters’ requests for comment.
The conglomerate bought the two cement companies from Holcim AG for $10.5 billion in May last year.
“If they want more time to repay the debt that means they do not have high cash flows. Whatever expansion plans announced by Adani Ports, Adani Enterprises, and even Adani Total, for the next two years will undergo delays,” said Avinash Gorakshakar, head of research at Profitmart Securities.
The report comes in the wake of US short-seller Hindenburg’s allegations of ‘corporate con’ raised in January against the conglomerate.
Seven listed Adani Group companies lost $120 billion in market value in the aftermath of the Hindenburg report. Since its release on January 24, Adani Group stocks have lost between 22% and 80% of their value.
- Reuters, with additional editing by Vishakha Saxena