Adani Ports proposes to repurchase $195 million of its 2024 bond at a reduced price

27 Sep 2023 , 11:55 AM

The Indian company Adani Ports and Special Economic Zone Ltd. will make a second tender offer for the notes in as little as a few months, offering to buy back up to $195 million at a discount from their issue price on its notes due in 2024. 

According to a statement released on Wednesday, the business, which is a component of the conglomerate financed by Gautam Adani, stated that it would finance the purchase using cash on hand. The firm will pay $975 for every $1,000 in principal for debt presented by October 11th. The deal price then decreases to $965 per $1,000 after that. 

It stated, ‘The Tender Offer’s primary objective is to partially prepay the Company’s near-term debt maturities.’

The Adani group has been working to win back investor trust in recent months after a selloff in its bonds and shares was sparked by a Hindenburg Research study alleging corporate wrongdoing. Officials from Adani have consistently refuted the accusations. 

The notes recovered and were trading at 96.4 cents on the dollar on Wednesday, according to prices compiled by Bloomberg, after falling as low as 85.8 cents on the dollar in February when Hindenburg published their claims.

Through tender offers to bondholders, firms can repurchase debt, allowing them to retire some or all of the securities before to their maturity date.

The announcement by Adani defies the general trend. Following a steep increase in interest rates, businesses have started repurchasing less debt. They can avoid having to borrow more expensive new debt by holding bonds with lower coupons for extended periods of time.

Data gathered by Bloomberg shows that the bond’s outstanding principal is $520 million and is due in July of the following year. On October 26 at 5:00 p.m. in New York, the tender offer will terminate.

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