Adani Green unveils plan to refinance 2024 USD notes

The Adani group's Adani Green Energy Ltd plans to raise funds via a new bond issuance in order to refinance its USD Notes due in September 2024, suggests a filing with Singapore’s stock exchange SGX. The Adani Green Energy Ltd stock closed 1.13% down at ₹1,532.85 on the NSE today.

“Enclosed hereto as Annex A is a copy of a refinancing plan in respect of the U.S.$750,000,000 4.375 per cent. Senior Secured Notes due 2024 (the “Refinancing Plan”),” the company says via a filing. As per the terms of USD Notes, the bullet payment is due on 8th September 2024.

Adani Green Energy had approached the 144A/RegS market with a 3-year bullet senior secured debt of US$ 750 million in September 2021 to fund the capex of some of the underlying under construction projects. The issuer entity AGEL has operational capacity of 8,404 MW as on Nov 30, 2023.

The existing restricted reserves of the company as of September 30, 2023, comprised a senior debt service reserve account worth $264 crore and a hedge reserve (rollover of currency hedging) worth $365 crore. The total restricted reserves for the repayment of USD notes stood at ₹629 crore ($75.47 million).

"Possible Hedge Reserve is due to currency movement from the last compliance period till date. Possible additional hedge reserve = INR 427 Cr~USD 51.24 Mn," the company says via a filing.

"AGEL, the issuer, shall fully prepay the senior holdco USD notes of US$ 750 million on the due date. AGEL has current restricted reserves equivalent to US$ 75.47 million and as per USD/INR movement from the Hedge date till 22 November 2023 expecting an additional Hedge Reserve of US$ 51.24 Mn. Thus, the funds required for the repayment are approximately US$ 624 Mn only," the filing adds.

Last week, Adani Green announced a follow-on funding of $1.36 billion to further boost its construction financing framework to $3 billion, backed by a consortium of international banks. The green loan facility has been extended by a consortium of lenders which include BNP Paribas, Coöperatieve Rabobank U.A., DBS Bank, Intesa Sanpaolo S.p.A., MUFG Bank, Societe Generale, Standard Chartered Bank and Sumitomo Mitsui Banking Corporation.

The green loan facility is expected to play a pivotal role in enabling the development of the green energy producer's next milestone - the world's largest renewable energy park at Khavda in Gujarat. The funding also marks a significant achievement in developing 2,167 MW at Khavda in the initial stage and will be the stepping-stone for the future development of the Khavda renewable site.

Gautam Adani-led group faced its biggest challenge in four decades of existence in FY23. A report released by research firm Hindenburg accusing it of financial fraud and stock manipulation took group market capitalisation from ₹19.18 lakh crore on January 24 to less than ₹10 lakh crore in just 10 days. Despite the setback, Adani swung into action to calm investors’ nerves by reiterating that the “fundamentals of the group’s businesses are strong” and it has steady and assured cash flows to run its businesses and complete ongoing projects. The group fully prepaid margin-linked share-backed loans worth $2.15 billion on March 12 before the committed deadline of March 31.