Adani Founders to Prepay Borrowings Worth $1.1 Billion Amid Rout

By Bloomberg

Feb 06, 2023

image is BloomburgMedia_RPNGHNT1UM0W01_06-02-2023_10-00-06_638112384000000000.jpg

Signage atop the Adani Group headquarters in Ahmedabad, India, on Wednesday, Feb. 1, 2023. The crisis of confidence plaguing Gautam Adani is deepening, with the stock rout triggered by Hindenburg Research's fraud allegations erasing a third of the market value in his group’s companies despite the completion of a key share sale. Photographer: Dhiraj Singh/Bloomberg

(Bloomberg) -- Billionaire Gautam Adani and his family have prepaid $1.11 billion worth of borrowings backed by shares as the conglomerate seeks to allay investor fears and stem a stock rout that’s in its third week.

The founders’ early payment will help release 11.77 million shares in Adani Transmission Ltd., the group said in a statement Monday. As many as 168.27 million shares of Adani Ports & Special Economic Zone Ltd. will be released along with 27.56 million shares of Adani Green Energy Ltd.

Adani Ports extended gains to 8.5% after the announcement while Adani Transmission and Adani Green were down 10% and 5% respectively.

Adani is seeking to restore confidence in his sprawling conglomerate’s financial health after a scathing short seller attack in late-January wiped out more than $118 billion of the group’s market value and forced the flagship to scrap a share sale. US-based Hindenburg Research had accused it of accounting fraud and stock price manipulation, allegations Adani has repeatedly denied.

Inside the 19-Hour Meltdown That Junked Adani’s Share Sale

Last week, Bloomberg reported citing people familiar with the discussion that the Adani Group was in talks with creditors to prepay some loans backed by pledged shares. The key priority for the prepayment is to remove any concern about margin calls, the people said.

While there was no suggestion that Adani Group entities would struggle to make dollar debt payments due soon — and the firm has flagged interest coverage ratios that show it has the ability to meet such obligations — the move is an attempt to restore confidence after some banks stopped accepting the conglomerate’s securities as collateral in client trades.

Credit Suisse’s Wealth Unit Halts Margin Loans on Adani Debt

--With assistance from and .

(Updates with share reaction in the third paragraph. A previous version corrected the stock rout number in the third paragraph.)

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By P R Sanjai