Adani Ports and SEZ raise $750 mn via offshore bonds

On Wednesday, Adani Ports and Special Economic Zone Ltd. launched a bond offering to raise as much as $750 million. The launched bond offering is offshore which means it is registered abroad.

This deal stands to the third-largest deal made by an Indian company after the coronavirus pandemic disrupted the global economy. State-owned REC Ltd and agrochemicals major UPL Ltd stood first in this race by raising $500 million each.

SoftBank fueled company SB Energy pulled itself out from the deal, giving the deal in the hands of the Adani Ports. SoftBank is a Japanese conglomerate that provided a $600 million bond to the company.

As per the deal signed by the Adani ports, the company will be raising the set amount by the means of seven-year bonds with a rate of 4.2 percent. The bonds will mature in 2027.

Adani ports will repay its existing loans and its leftover subsidiaries with the amount raised by the deal. The debt of Krishnapatnam Port Co Ltd. acquires a considerable portion of the other debts of the company.

In July 2020 also the company had given a green signal to raise bond capital to $1.25 billion. While in 2019 the company raised back to $750 million and $650-million through a bond offering.

Adani’s renewable energy business too raised $500 million in May last year followed by $362.5 million through bond issuance in October 2019.

Shantanu Sahai, the MD and head of debt at Nomura India, said after the coronavirus hard-hit the market, the market is trying to revive and is opening its shutters securely since the early June. This revival in the economy followed by the markets is increasing hopes that high-yield (HY) issuers would be able to access it the latest by July or by August.

At the same time increasing tensions between India and China along with increasing COVID-19 infections is causing investors to be cautious.

Also Read TCS net profit in quarter 1 fall to Rs. 7,008 crore due to COVID