Adani NQXT Acquisition: Positive Diversification, Says Fitch Ratings

28 Apr 2025 CW Team

The global rating agency has described the acquisition as "credit neutral" but acknowledged its positive strategic implications. The deal, announced on April 17, 2025, involves APSEZ issuing new equity shares to the current shareholders of NQXT, who are part of the same promoter group as Adani Ports. The acquisition is still awaiting approval from shareholders and regulators.

Fitch believes the acquisition will not impact APSEZ’s financial health and expects the company’s gross leverage to remain stable at around 3.0 times between FY26 and FY29. The transaction is expected to significantly increase APSEZ’s global earnings contribution, rising from 4% to 10%.

Fitch noted that the deal will slightly increase the share of coal in the company’s cargo mix, though this is expected to decrease over time as container and other non-coal segments grow faster. Operationally, the impact will be limited as APSEZ already operates the NQXT terminal, which handles 35 million tonnes of coal annually and runs at 70% capacity.

The acquisition also requires very little capital expenditure in the near future, and the terminal’s long-term take-or-pay contracts and a lease life of 85 years provide stable cash flows for Adani Ports. Fitch added that there is minimal refinancing risk, as NQXT has no major debt repayments until 2030, and its debt features limits on borrowing and controlled cash outflows, helping maintain financial discipline.

While Fitch did not change APSEZ’s credit rating, it emphasised that the acquisition strengthens the company’s global business profile.

(ANI)

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Fitch Ratings has stated that Adani Ports and Special Economic Zone Limited’s (APSEZ) acquisition of the North Queensland Export Terminal (NQXT) will support the company’s international growth strategy, marking a positive step for long-term global expansion. The global rating agency has described the acquisition as credit neutral but acknowledged its positive strategic implications. The deal, announced on April 17, 2025, involves APSEZ issuing new equity shares to the current shareholders of NQXT, who are part of the same promoter group as Adani Ports. The acquisition is still awaiting approval from shareholders and regulators. Fitch believes the acquisition will not impact APSEZ’s financial health and expects the company’s gross leverage to remain stable at around 3.0 times between FY26 and FY29. The transaction is expected to significantly increase APSEZ’s global earnings contribution, rising from 4% to 10%. Fitch noted that the deal will slightly increase the share of coal in the company’s cargo mix, though this is expected to decrease over time as container and other non-coal segments grow faster. Operationally, the impact will be limited as APSEZ already operates the NQXT terminal, which handles 35 million tonnes of coal annually and runs at 70% capacity. The acquisition also requires very little capital expenditure in the near future, and the terminal’s long-term take-or-pay contracts and a lease life of 85 years provide stable cash flows for Adani Ports. Fitch added that there is minimal refinancing risk, as NQXT has no major debt repayments until 2030, and its debt features limits on borrowing and controlled cash outflows, helping maintain financial discipline. While Fitch did not change APSEZ’s credit rating, it emphasised that the acquisition strengthens the company’s global business profile. (ANI)

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