The Adani Group plans to prepay a bridge loan of $500 million due next month after some banks balked at refinancing the loan after a short seller attack that sent the group’s assets tumbling.
Barclays Plc, Standard Chartered Plc and Deutsche Bank AG are among the banks that have loaned Adani $4.5 billion to finance the purchase of Holcim Ltd.’s cement assets. Part of the loan is due on March 9.
Lenders were in talks to refinance the loan for up to a week before the critical report from Hindenburg Research was published, according to people familiar with the matter. The talks stalled after reports alleging fraud led to a massive sell-off, the people said, asking not to be identified for personal matters.
An Adani spokesman said the conglomerate had been in talks with banks to refinance part of the loan, but the group planned to repay it. The spokesperson said discussions with the banks have not ended. Representatives for Barclays and Deutsche Bank declined to comment. A representative for Standard Chartered was not immediately available.
It marks the second time in a week that the group has taken steps to pay down debt as it struggles to regain investor confidence and stave off a share rout. Billionaire Gautam Adani and his family have paid off $1.11 billion in stock-backed debt, the group said Monday.
Adani faces a margin call of more than $500 million on the loan, prompting the Indian tycoon to pay off all of the debt, the Financial Times reported Wednesday. The Adani Group said it had not received any formal requests for margin calls and that the loan was being repaid early “per prepayment plan,” the newspaper reported.
Global banks are scrambling to scrutinize the group after the Hindenburg report. The wealth arm of Citigroup Inc. has stopped accepting Adani securities as collateral for margin loans, following a similar move by Credit Suisse Group AG.
The corporate empire of Adani, once the world’s second richest man, has been dismantled following the Hindenburg report into allegations of malpractice. The ten Adani group companies include Adani Total Gas Ltd., Adani Enterprises Ltd. and Adani Transmission Ltd. at one point it removed $117 billion from the combined market value in the selloff.
Brief Report
Hindenburg alleged that the web of Adani-family controlled offshore shell entities in tax havens used to facilitate corruption, money laundering and theft of taxpayers. The conglomerate called the report “false,” and threatened legal action. Adani gave a video speech last week saying the group’s balance sheet is healthy.
Adani Group shares have rallied this week following debt repayments and as traders cover short positions. Seven of the group’s 10 stocks rose in Wednesday’s session, with flagship Adani Enterprises rallying 20% after its biggest rise since 2020 the previous day. The stock has more than doubled from its low during the recent selloff.
–With help from Shikhar Balwani.
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