Mumbai: Adani Group on Sunday said it has prepaid share-backed promoter loans amounting to $2.15 billion taken against pledged shares of various group entities. With this, group officials said, the promoters have freed all equity pledged as collateral for margin-linked share-backed financing, ahead of the committed timeline of March 31, 2023.
Additionally, the group said it has also prepaid another loan tranche of $500 million as part of financing the acquisition of the group's cement as part of financing the acquisition of the group's cement assets, ACC Ltd and Ambuja Cements, last year.
"This is in line with the promoters' commitment to increase equity contribution. The promoters have now infused $2.6 billion of the total acquisition value of $6.6 billion for Ambuja and ACC," the group said in a statement late on Sunday. "The entire prepayment programme of $2.65 billion has been completed within six weeks, which testifies (to) strong liquidity management and access to capital at sponsor level, supplementing the solid capital prudency adopted at all portfolio companies," the statement said.
According to people in the know, promoter entities of Adani Group companies had an overall exposure of close to ₹15,000 crore ($1.83 billion) in margin-linked loans. Additional pledges were created, following the decline in Adani Group companies' share prices due to the Hindenburg Research report.
Margin-linked loans are taken by pledging an underlying security - such as equity shares - as collateral. Lenders typically lend against these securities after a haircut which essentially means that the value of sanctioned loans is lower than the current market value of the pledged security.
Some Loans Remain
Lenders call for top-up margins in the form of additional security when there is a fall in stock price, where the borrower must make good the shortfall in value of underlying collateral.
"The promoters have been prepaying these loans, which were mainly taken from a group of foreign banks and select NBFCs," said a senior banker involved in the transaction. "There, however, remain outstanding share-backed loans taken by various group companies and Adani is in discussions to get these released too."
Sources said the group is currently in discussion to raise further funds from investors, which will be used towards repaying other outstanding loans, including part of the acquisition financing of ACC and Ambuja.
ET on March 10 reported that the Adani family is looking to raise a little over ₹3,000 crore by a secondary sale of shares in Ambuja. The ET report, citing people aware of the matter, said the family is planning to sell approximately 4.5% of the company in the market, based on current market value, which could help raise ₹3,382.02 crore. The promoter family has already received permission from its lenders to pursue this share sale.
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