Billionaire Gautam Adani-controlled Adani Ports and Special Economic Zone (APSEZ) is seeking to raise about $750 million by selling overseas bonds in the first major foreign issuance by a local infrastructure company after the ruling combine was voted back to power with a stronger majority.
The proceeds would be used to expand current capacity or buy assets available locally, and to refinance existing liabilities, three executives aware of the bond sale plans told. The issue would open in the next three to six weeks for subscription, and the company has already appointed investment bankers.
“Due diligence sessions with the management are currently on. Soon, bankers will begin road shows,” said one of the executives cited above.
These bonds could be of five or 10-year maturities and will be priced after adding a mark-up over and above similar maturity US Treasury yields. Pricing guidance is yet to be fixed.
Standard Chartered Bank, Citi, JP Morgan, MUFG, Barclays and DBS are some of the foreign bankers that are helping the company to raise the money overseas.
Adani Group didn’t respond to ET’s mailed query on the bond sale until the publication of this report. Individual banks could not be contacted immediately for comments. These bonds are Regulation S instruments that allow buyers outside the US to invest in the dollar-denominated paper. This would be the fourth such issuance by the company.
The company’s total debt was at Rs 26,071 crore in FY19, compared with Rs 22,204 crore a year ago, according to the ETIG database. The 15 per cent increase in leverage coincided with robust expansion at the company. APSEZ embodies a large network of ports with India’s largest SEZ at Mundra. APSEZ Port business is integral to its logistics vertical. It is India’s largest private port operator with presence in 10 locations.
The company has taken up some large expansion projects. It signed a 50-year BOT (build, opeate and transfer) agreement for operating a container terminal at Yangon, Myanmar, underscoring its focus on Southeast Asia. The company has been also developing a transhipment port at Vizhinjam, Kerala. During the January-March quarter, Adani Port reported a 41.45 per cent increase in its consolidated net profit at Rs 1,314.19 crore. Last week, the company said that its board has approved the proposal for buying back up to 3.92 crore equity shares, or 1.89 per cent of the total equity base, at a maximum buyback price of Rs 500 per share, for an aggregate amount not exceeding Rs 1,960 crore. In the past one month, APSEZ shares have gained more than 14 per cent compared with a 3.4 per cent rise in the Sensex.