Adani Ports starts a $130M buyback of debt securities

Adani Ports and Special Economic Zone, based in India, has started a buyback program for certain debt securities. The buyback program will go towards prepaying part of the company’s loans that are due in 2024.

Adani Ports starts buyback program for debt securities

Adani Ports and Special Economic Zone is a group company of the troubled Adani Group. According to an exchange filing, the company has floated a tender of up to $130 million in outstanding debt. The filing comes as the company seeks to boost investor confidence after the shares in this group plunged earlier this year, according to a short-sellers report.

Billionaire businessman Gautam Adani heads the company. The seven-listed stocks at the company have lost around $114 billion worth of market value since a report published on January 24 by Hindenburg Research.

The research published by Hindenburg Research accused the company of improperly using offshore tax havens and manipulating stocks. The group has denied all the allegations made in this report.

A recent report by the Economic Times said that the Adani Group was planning to buy back foreign currency bonds of several group companies. According to the report, the buyback program will commence with the initial tranche of $650 million at the ports unit.

The group is expected to start the first tranche worth between $250 million and $300 million during the current quarter and buy back the remainder in the coming quarters. The company has also mentioned the instances where any changes to the buyback program will be announced.

“The company may choose to either accelerate or defer this plan subject to its liquidity position and the market conditions and further subject to the terms, including the pricing, to be separately announced for each of such tranches,” the company’s filing said.

Adani Ports shares and bonds recover

Adani Ports and Special Economic Zone is the largest commercial port operator in India. It accounts for nearly a quarter of the cargo movement in India. The company has a presence across 13 ports in the country in seven maritime ports of Andhra Pradesh, Goa, Gujarat, Kerala, Maharashtra, Odisha, and Tamil Nadu.

However, the company’s stock was affected by the Hindenburg report released earlier this year. Following this report, the stock is trading at a discount of nearly 20% on a year-to-date basis. The recently started buyback program is already triggered a slight recovery in the stock.

The shares and bonds at Adani Group have made a significant recovery in the last month after the company repaid part of its debt. The recovery was also attributed to a $1.9 billion investment in the company by boutique investment company GQG Partners. The stock has made a return of around 4% in the last month.

The USD-denominated bonds issued by Adani Ports increased after the company issued a tender of 3.375% 2024 maturity dollar bonds.