India’s Adani Group on Monday said shares related to some group companies will be released following the pre-payment of $1.11 billion of loans ahead of their maturity in 2024 while negating media reports that said the conglomerate was planning to slash its capital spending.
With the pre-payment of loans against shares, promoter holdings of 1.4% in Adani Transmission Ltd (ADAI.NS), 3% in Adani Green Energy Ltd (ADNA.NS) and12% in Adani Ports and Special Economic Zone Ltd (APSE.NS) will be released, the embattled group said in a statement.
The loan pre-payment is “in light of recent market volatility and in continuation of the promoters’ commitment to reduce the overall promoter leverage,” the group said.
Adani Group plans to cut back its capital spending while offering more collateral in the form of stock pledges to lenders, the Indian newspaper Mint said, citing people familiar with the development.
“False report, on the contrary, Adani Group is moving to prepay all LAS (Loans Against Shares) finance,” a spokesperson for the group said in a separate emailed statement to Reuters.
The group’s domestic lenders do not intend to limit the conglomerate from utilizing sanctioned but unused credit lines for fears it could backfire and result in defaults, Mint said in another report, citing bankers.
Buy Bitcoin NowIn the harsh fallout of Hindenburg’s report, investors offloaded Adani shares, while the group’s flagship company, Adani Enterprises, and was forced to call off a $2.5 billion share sale last week. Meanwhile, Group Chairman Gautam Adani was stripped of his title as Asia’s wealthiest person and slipped down the global rankings of the wealthy.
Shares of Adani Group companies have shed more than half their market value, exceeding a cumulative $110 billion, after U.S. short-seller Hindenburg Research in January raised doubts about the group’s debt levels and use of tax havens.
