Adani Cement raises $3.5 bn to refinance debt – EQ
Adani Cement, through Endeavour Trade and Investment Ltd, on Friday announced the “successful completion” of its refinancing program for acquisition debt taken for Ambuja and ACC, through a $3.5-billion financing package, raised from a clutch of international banks. “This showcases Adani’s robust access to the global financial market and strong liquidity position. This achievement reflects our commitment to financial stability and growth. This facility will result in an overall cost saving of $300 million for the Adani Cement vertical,” said Adani Group in a statement.
Adani Cement is the second largest cement player in India, with the $6.6-billion acquisition of Ambuja Cements Ltd and ACC, the largest acquisition in infrastructure and materials space that concluded in September 22.
The $3.5-billion facility marks the continued execution of the capital management plan outlined in September 2022 that will see step wise planned deleveraging of Adani Cement, said the conglomerate in a press release.
The refinancing of the loan was concluded with 10 international banks including DBS, First Abu Dhabi Bank and Mizuho Bank for a tenor of 3 years, the group said in a statement, adding that it would save Adani Cement about $300 million in costs.
“The re-financing program of $3.5 billion has been concluded with a clutch of international banks with debt maturity of up to 3 years, testifies the strong support and access to capital, supplementing the solid capital prudency adopted at all portfolio companies,” said Adani.
Currently, Ambuja Cements and ACC have a combined installed production capacity of 67 MTPA to conclusively mover to 100 MTPA by 2025 with the announced acquisition of Sanghi Cement. “ACC & Ambuja are among the strongest brands in India with immense depth of manufacturing and supply chain infrastructure – these along with benefit from
synergies with the integrated Adani infrastructure platform, especially in the areas of raw material, renewable power and logistics, where Adani Portfolio companies have vast experience and deep expertise has resulted in to improvement in the EBITDA / Ton from Rs 340 / ton in quarter ending September 2022 (immediately after the acquisition) to Rs 1,253 / ton in the quarter ending June 2023 which represents embedded deleveraging through elevated coverage positioning,” said Adani.
Adani Group entered the cement sector last year with a $10.5 billion deal to buy Ambuja and ACC from Swiss giant Holcim. In August, it bought another local cement maker, Sanghi Industries, for $295 million.
Shares in ACC, which were down over 3% before the announcement, trimmed losses to 2.5%, while shares in Ambuja pared some losses to trade around 1.1% lower. Adani Cement plans to increase its cement manufacturing capacity to 100 million tonnes per year by 2025 from 67 MTPA currently.
