Adani shares overleveraged Business

Adani Ports will repurchase another $195 million in 2024 bonds

Adani Ports and Special Economic Zone would purchase back up to $195 million of its 2024 bond, the billionaire Gautam Adani-led business said on 27th September, 2023, in an exchange filing. Adani Ports began a debt-securities repurchase programme in April to settle a portion of its near-term liabilities due in 2024. Earlier in 2023, the ports and logistics firm floated a tender of up to $130 million to bolster investor confidence after a short seller’s report in January 2023 strained the Group’s shares.

The corporation has stated that it intends to continue purchasing outstanding notes for cash over the following three quarters. The Hindenburg Research study on 24th January 2023 accused the Group of inappropriate use of offshore tax havens, stock manipulation, and claimed that Adani shares overleveraged. The Group denied all charge, calling them meritless.

Adani Ports and Special Economic Zone will pay off a USD 195 million loan that is due in 2024

Adani Ports and Special Economic Zone will pay off USD 195 million in debt due in 2024 as the company led by Gautam Adani seeks to reassure investors after being targeted by a US short-seller. APSEZ said in a stock exchange filing that it will use its financial reserves to buy back USD 195 million in bonds due in 2024. After the repurchase, USD 325 million will remain of the USD 520 million principal outstanding.

The company’s board of directors has authorised tranche II of the tender. This tender offers to acquire for cash up to USD 195 million in aggregate principal amount of the outstanding 3.375 per cent senior notes due 2024, representing 30% of the principal amount. The corporation purchased back its July 2024 bonds for cash USD 130 million in aggregate principal amount in May 2023 and indicated that it will buy back 20% of the bonds’ principal amount in the next four quarters.

The corporation plans to buy up to USD 195 million in bonds in the second tranche. This amounts to 30% of the bonds’ principal amount (USD 650 million). USD 520 million remained outstanding after a USD 130 million repurchase in May. The tender is open until October 26th, 2023 (5 p.m.) in New York. Since Hindenburg Research’s January 24th report, Adani Group has sought to regain investor trust. The Hindenburg accused the Group of accounting fraud and inappropriate use of offshore tax havens for Adani shares overleveraged.

The organisation has denied all charges.

The Chief Financial Officer (CFO) of the Adani Group reassures investors about the company’s finances

Adani group officials, including group CFO Jugeshinder Singh, undertook roadshows in Singapore and Hong Kong last month to convince investors that the company’s finances are under control. From March 7 to 15, these will be expanded to Dubai, London, and the United States. Executives informed investors that they plan to meet forthcoming debt maturities by selling private placement notes and utilising cash from operations. On January 24 2023, Hindenburg Research accused the Adani group of stock manipulation and accounting fraud.

The research accused the Group of using several offshore shell firms to get Adani shares overleveraged. The organisation has refuted all claims, calling them “malicious”, “baseless”, and a “calculated attack on India”.

Adani Ports will pay for the purchase with cash reserves 

Adani Ports and Special Economic Zone will buy back up to US$195 million of its 2024 bond as the Indian group led by billionaire Gautam Adani strives to move past claims levelled by a US short-seller. The 3.375 per cent notes rose the highest since April on news that the corporation will pay US$975 for every $1,000 in principle for debt presented by 11th October 2023.

Following that, the offer price was reduced to US$965 per $1,000, the company announced on 27th September 2023. Adani Ports stated that the acquisition would be paid for with cash reserves and that the bond had a principal value of US$520 million. In recent months, the Adani group has been attempting to restore investor trust following a short-seller Hindenburg Research report on the controversy “Adani shares overleveraged.” Officials from Adani have repeatedly refuted the accusations.

After falling as low as 85.8 US cents on the dollar in February following the publication of Hindenburg’s charges, the 2024 notes rebounded and were trading at 96.4 US cents on the dollar on 27th September 2023. The buyback offer is more than the current price. Bond buybacks enable firms to repurchase debt by making tender offers to bondholders, allowing them to retire some or all of the securities before their due date.

This is the Indian firm’s second tender offer for 2024 notes in as many months. In the following quarters, it aims to continue repurchasing notes. Adani’s declaration deviates from the worldwide trend. Companies have been repurchasing less debt since interest rates climbed dramatically. By holding bonds with lower coupons for a more extended time, they avoid incurring more expensive new debt.

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