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Adani Group’s solar-energy unit has unveiled an initial blueprint for repaying its $750 million bond due next year, extending a rally in the debt as the Indian conglomerate rebuilds confidence after a market rout earlier this year.
Adani Green Energy Ltd., part of billionaire Gautam Adani’s empire, will redeem the notes in full by its Sept. 8 due date, it said in a filing to Singapore’s stock exchange. The bond’s underwriters will provide a funding letter for $675 million and the company will use equity transaction proceeds to build up the repayment sum, it added.
The filing, which also lists $75.47 million in restricted reserves, didn’t specify what the funding letter will contain or where the equity transaction proceeds will come from.
“The letter mentioned about the equity transaction proceeds but we have to watch how the company is planning to execute this transaction,” said Justin Ong, a credit analyst at Columbia Threadneedle. As for the funding letter, “this is helpful but it is not clear whether committed facilities are firmly in place.”
Still, the bond extended its rally for a fifth day to touch the highest since April 2022, according to Bloomberg-compiled data. The bond was indicated up 0.2 cent on the dollar at 96.8 cents at 4:04 p.m. Singapore time. All of Adani Group’s other US-currency notes also climbed.
The finances of Adani Group’s various subsidiaries have attracted investor attention after US short seller Hindenburg Research accused the conglomerate of corporate fraud earlier this year, allegations that the group has repeatedly denied. While some of the group’s dollar bonds have fully recouped their losses, others remain below their pre-crisis level.
The terms of the Singapore-listed Sept. 2024 bond require Adani Green to come up with a refinancing plan nine months before maturity. The firm’s chief financial officer Phuntsok Wangyal told analysts on an earnings call earlier this year that a “liquidity pool” had been created to be tapped for repaying the notes.
Adani Group’s executives have sought to restore investor trust after Hindenburg’s broadside: they prepaid debt, held in-person meetings with investors from Hong Kong to London, and spent hundreds of millions of dollars repurchasing the debt of units including Adani Electricity Mumbai Ltd. and Adani Ports and Special Economic Zone Ltd.
Just this week, Adani Green raised a $1.4 billion loan for a renewable energy project, fueling a stock rally in the conglomerate’s units that boosted their collective market value by $23 billion.
--With assistance from Harry Suhartono.
(Updates with analyst quote in fourth, bond prices in fifth paragraphs)
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