Adani to repay $1.1 billion loan early to ease pressure on subsidiaries' shares

By Geoffrey Smith 

Investing.com -- Gautam Adani and his family have gathered the funds to repay a $1.1 billion loan early, aiming to ease the pressure on the stocks of the Indian billionaire's portfolio companies.

The Financial Times cited a statement from Adani Enterprises Ltd (BO:ADEL) saying that the loan, which was due in 2024, had been extended by a consortium of banks including Citigroup, JPMorgan, Deutsche Bank, Barclays and Japan-based SMBC Group.

According to the FT, the repayment will release 168 million shares in Adani Ports (BO:APSE), 27M in Adani Green Energy Ltd (BO:ADNA) and 12M in Adani Transmission Ltd (BO:ADAI), three of the group's most valuable portfolio companies. 

That will give Adani and his relatives more financial room to maneuver as it scrambles to meet a succession of debt repayments which his companies are due to repay this year. 

However, it appears unlikely to dispel doubts about the company's ability to meet all of those debts, which short-seller Hindenburg Research argues are only propped up by collateralization against holdings of stock that remains wildly overvalued.

Hindenburg's report has galvanized opposition to the government of Prime Minister Narendra Modi in recent days, with lawmakers shutting parliament down on Monday for a third straight session as the government continued to refuse to allow a debate on the report. 

Adani hails from the same northwestern state of Gujarat as Modi, and has borrowed heavily to finance the growth agenda touted by Modi over the last eight years. Both Adani and Modi's BJP Party reject suggestions of undue government influence in favor of Adani's businesses.

Adani Enterprises, the mogul's flagship holding company ended Monday down 0.9% in Mumbai. It's down over 55% since Hindenburg published its explosive allegations of accounting fraud and stock manipulation. Adani continues to reject the allegations as baseless.