Adani Group Set to Finalize $3.5 Billion Loan Deal, Expected to Enhance Ratings and Preserve Foreign Exchange: Sources

Following a period of wealth erosion triggered by allegations from American short-seller Hindenburg, the Adani Group is on the verge of finalizing a $3.5 billion loan deal to refinance existing debt incurred during the acquisition of Ambuja Cements Limited. Several banks and financial institutions have reportedly expressed their willingness to extend this loan, signifying increased confidence in the conglomerate's financial stability.

This deal, expected to be sealed this week, is anticipated to rank among the ten largest loans in Asia this year, according to anonymous sources cited by Bloomberg. The loan is likely to be priced between 450-500 basis points all-in-costs over the benchmark secured overnight finance rate.

A total of 18 global banks, including Barclays, Deutsche Bank, and Standard Chartered, are reportedly in agreement with the group for refinancing the debt, as reported by The Economic Times.

As part of the loan agreement, the Adani Group's promoter, the Gautam Adani family, is set to prepay $300 million.

This refinancing initiative is estimated to save approximately a quarter of a billion dollars over a span of three years, as per ET reports. The Adani Group has already repaid nearly $2 billion in Ambuja and ACC loans.

Among the 18 lenders involved are MUFG, Mizuho, SMBC, DBS, First Abu Dhabi Bank, Standard Chartered Bank, Barclays, Deutsche Bank, ING, BNP Paribas, and Qatar’s QNB. Disbursements of the loan are scheduled to commence next week.

The loan's extended repayment timeline now reaches 2027. Beyond reducing borrowing costs, this move is expected to bolster the Adani Group's credit ratings.

Earlier this year, Gautam Adani held the title of India's wealthiest individual until Hindenburg accused his conglomerate of stock manipulation. Following the allegations, his net worth plunged to $40 billion in the wake of a stock market downturn.

However, in recent months, Adani has managed to recover a portion of his lost wealth thanks to investments made by Indian-American investor Rajiv Jain in Adani Group stocks and various measures that rekindled investor confidence. As per Forbes, Adani's current net worth stands at $52.8 billion.