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The Adani Group is reportedly in talks with lenders to renegotiate the terms of outstanding loans worth $4 billion, initially obtained in August last year to acquire cement assets of ACC and Ambuja Cements from Switzerland-based Holcim group. Amid the ongoing loan crisis, the conglomerate seeks to extend the tenor of its $3 billion bridge loan from the existing 18 months to five years or more. Additionally, the group aims to convert a $1 billion mezzanine loan tranche, with a current maturity of 24 months, into senior secured debt with a repayment schedule extending up to five years.
The negotiations come at a time when the business environment has been challenging, with many companies struggling to raise funds through traditional methods like issuing bonds. This has prompted the Adani Group to explore alternative financing options and work closely with lenders to restructure their debt obligations.
Lead banks in the transaction, Standard Chartered Bank, Deutsche Bank, and Barclays Bank, declined to comment. Several other foreign lenders are also part of the consortium. Despite the ongoing negotiations, the Adani Group has already repaid $1.5 billion of Ambuja and ACC loans, including $1 billion of promoter loans from three foreign banks and $500 million, which was part of the initial $3.5 billion bridge loan.
Following difficulties in raising $500 million through international bonds, the Adani Group sold stakes worth INR 715,446 crore in various group firms to US equity boutique firm GQG Partners. Sources indicate that the proceeds were used to repay a portion of the ACC-Ambuja debt. With the next repayment due in February 2024, the group aims to conclude negotiations ahead of schedule.
Lenders have reportedly agreed in principle to extend the loan tenure to five years. However, future discussions will focus on loan pricing. The original plan to refinance a large portion of the loans via long-term bonds has become challenging due to current market conditions. As a result, lenders favour extending the loan term but may also require the group to prepay a part of the outstanding debt.
These renegotiations are part of a broader trend where companies worldwide are seeking more flexible terms to manage their debt amid a challenging economic climate. The Adani Group's proactive approach towards addressing their loan obligations reflects a desire to ensure the long-term success and financial stability of the company.
It is essential to note that the Adani Group's financial stability will have a significant impact on its various ongoing projects, such as the renewable energy projects, port developments, and airport acquisitions. Ensuring that the group maintains a strong financial position will be critical for the timely completion and success of these endeavours.
In conclusion, the Adani Group is actively engaging with lenders to renegotiate the terms of its $4 billion loans for the acquisition of cement assets from the Holcim group. While extending the repayment schedule and converting loan tranches are under consideration, the conglomerate has already made significant repayments, and the final outcome of these negotiations remains to be seen. As the group navigates the loan crisis, its ability to restructure its debt will play a crucial role in its ongoing projects and overall financial stability.
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