The Adani Group is reportedly making headway in acquiring a $3.5 billion (₹29,140 crore) syndicated loan to refinance the debt incurred during its acquisition of Ambuja Cements.
What Happened: Several banks such as Barclays, Deutsche and Standard Chartered are said to be in talks to contribute around $250 million (₹2,100 crore) each to the syndicated loan, Bloomberg reported, citing sources. These banks have now obtained internal consent for the loan agreement, as per sources privy to the proceedings.
The official signing of the deal is anticipated shortly, albeit the conditions may undergo alterations. The initial all-in-cost is projected to be the secured overnight financing rate (SOFR) plus nearly 500 basis points.
Notably, these three banks reportedly belong to one cluster of prospective lenders, with the rest expected to offer around $400 million (₹3,330 crore) each. The status of these other banks remains undisclosed.
Why It Matters: The securing of the syndicated loan could aid Adani Group in managing the financial implications of this major acquisition. It would also highlight the confidence of global banks in Adani Group’s business strategy and its ability to repay the loan.
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The loan may also help bolster investor confidence in the firm after the company condemned an upcoming report from the Financial Times into the allegations of financial fraud levelled against the Adani Group since the Hindenburg report.
Price Action: Ambuja Cements’ share price was up 1.35% at ₹436 on Tuesday afternoon.
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