Adani Group to fundraise $4.5 bn through offshore loans

13 Jun 2022 CW Team

Adani Group, which recently had acquired Holcim, is in talks with over a dozen foreign banks to raise $4.5 billion through a mix of overseas loan instruments.

It will be one of the biggest loan-based fundraisings in foreign currency by an Indian firm. Tenured instruments, like bonds offering pre-specified coupons, are usually sold overseas to raise large cash.

The loan includes mezzanine financing, stock-backed bridge loans to be paid back in cash, and a senior debt facility for 18 months. The last of these structured instruments could be refinanced later with either a long-term bond or loan.

Proceeds from the latest fundraising will be used to part-finance the acquisition of Holcim’s stakes in Ambuja Cements and ACC.

The senior debt facility will fundraise $3 billion, while the mezzanine line will raise $1 billion. The bridge loan with 1-3 years maturities is pegged at $500 million and would be paid back in cash.

Adani group will raise $4.5 billion through a mix of offshore loans. The mezzanine loan will be priced between 7-8%. The loans are expected to be priced after adding 450 basis points to the Secured Overnight Financing Rate (SOFR).

Some of the included banks are BNP Paribas, Citi, JP Morgan, MUFG, Mizuho Bank, SMBC and a few Middle East-based lenders.

Mezzanine financing is a mix of debt and equity financing, which gives the right to convert the debt to equity in case of default.

The company is exploring the capacity of each bank to lend. Each bank may lend between $200-500 million.

Adani Group plans to spread the syndication to only three banks. The three banks underwrote the whole sum offering about $1.8 billion each. It also plans to bring in $3 billion as promoter equity.

The Adani Group is acquiring the two companies for $10.5 billion. The open offers for Ambuja Cements and ACC will begin on 6 July and close on 19 July.

Image Source

Also read: Holcim Group to sell Ambuja Cement and ACC Ltd

Adani Group, which recently had acquired Holcim, is in talks with over a dozen foreign banks to raise $4.5 billion through a mix of overseas loan instruments. It will be one of the biggest loan-based fundraisings in foreign currency by an Indian firm. Tenured instruments, like bonds offering pre-specified coupons, are usually sold overseas to raise large cash. The loan includes mezzanine financing, stock-backed bridge loans to be paid back in cash, and a senior debt facility for 18 months. The last of these structured instruments could be refinanced later with either a long-term bond or loan. Proceeds from the latest fundraising will be used to part-finance the acquisition of Holcim’s stakes in Ambuja Cements and ACC. The senior debt facility will fundraise $3 billion, while the mezzanine line will raise $1 billion. The bridge loan with 1-3 years maturities is pegged at $500 million and would be paid back in cash. Adani group will raise $4.5 billion through a mix of offshore loans. The mezzanine loan will be priced between 7-8%. The loans are expected to be priced after adding 450 basis points to the Secured Overnight Financing Rate (SOFR). Some of the included banks are BNP Paribas, Citi, JP Morgan, MUFG, Mizuho Bank, SMBC and a few Middle East-based lenders. Mezzanine financing is a mix of debt and equity financing, which gives the right to convert the debt to equity in case of default. The company is exploring the capacity of each bank to lend. Each bank may lend between $200-500 million. Adani Group plans to spread the syndication to only three banks. The three banks underwrote the whole sum offering about $1.8 billion each. It also plans to bring in $3 billion as promoter equity. The Adani Group is acquiring the two companies for $10.5 billion. The open offers for Ambuja Cements and ACC will begin on 6 July and close on 19 July. Image Source Also read: Holcim Group to sell Ambuja Cement and ACC Ltd

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