Adani Group to prepay loans worth $500 million after banks turn cautious on refinancing: Report

Adani Group plans to pay off $500 million of short-term loans due in March after banks became wary of the prospect of refinancing the ports-to-retail conglomerate's debt amid ongoing disputes, a report mentioned, citing people familiar with the matter.

Last year, Adani Group secured a $4.5 billion bridge loan from Barclays, Standard Chartered and Deutsche Bank, among others, to finance the acquisition of Indian cement assets of Holcim ACC and Ambuja Cement. The loan is due on March 9. While lenders discussed refinancing that debt until a week before Jan. 25, talks stalled after U.S. short seller Hindenburg Research published a negative report on the group, the people said. The development, according to the report, indicates the first concrete instance where banks have become cautious about exposure to the Adani Group.

French gas provider TotalEnergies on Wednesday suspended plans for a multibillion-dollar green hydrogen partnership with the conglomerate pending audits. MSCI said it was reviewing the eligibility of the Adani Group's securities for its benchmarks. Meanwhile, Japanese asset managers have stepped up disclosure of funds exposed by the Adani Group.

Last week, the Gautam Adani-owned conglomerate subscribed loans for shares worth more than $1.1 billion. While the group was in talks to refinance the acquisition of Holcim's assets, it decided to pay $500 million up front, a company spokesman said. However, according to the spokesperson, negotiations with creditors are still ongoing.

Advance payments can be aimed at boosting confidence, as evidenced by the recovery in the shares of group companies. However, the development also suggests a run on Adani Group's bonds, which could make them less lucrative for lenders to issue loans. This was witnessed in the banks Credit Suisse, Citigroup and Standard Chartered, which refused to issue margin loans against Adai Group securities.

Shares of Adani Enterprises were down 3.82 percent at Rs 2,076.15 apiece at 10:10 am on Thursday.