New Delhi: Adani Ports and Special Economic Zone (APSEZ) decision to buy back as much as USD 130 millions of its July 2024 bonds is an opportunistic exchange, reflecting the company's proactive management of upcoming debt maturities in advance, said S&P Global Ratings on Tuesday. Adani Ports and Special Economic Zone (APSEZ) on Monday started the first debt buyback programme since billionaire Gautam Adani's conglomerate was targeted by a US short-seller in January.
"The Indian ports and logistics operator plans to buy back up to USD 130 million per quarter of its notes. The transaction, if accepted by investors, will facilitate Adani Ports' strategy to reduce refinancing risks," the rating agency said.
APSEZ floated a tender to buy back as much as USD 130 millions of its July 2024 bonds and similar amounts in each of the next four quarters, it had said in an exchange filing, as it looks to regain investor confidence by showing that its liquidity position is comfortable. "We believe it is an opportunistic exchange, reflecting the company's proactive management of upcoming debt maturities in advance," S&P Global Ratings said.
The rating agency said that it expects Adani Ports (BBB-/Negative/--) to have a sufficient cash balance to repay USD 130 million of the notes. "The company will capitalize on its healthy operating cash flow, which we project at Rs 89 billion for fiscal 2024," it said.
While observing that Adani Ports should have adequate liquidity over the next 12 months ending March 31, 2024, the rating agency said that the company will remain flexible with capex, adjusting it according to business performance and funding availability. Adani Ports handled about 339 million metric tonnes (MMT) of cargo volume in fiscal 2023.
"Although this was slightly below our estimate of about 355 MMT, we expect the company to maintain robust EBITDA margins of 55 -60 percent over the next two fiscal years, underpinned by a stable operating performance," it said. Shares of Adani group companies plummeted after Hindenburg Research in a January 24 report accused it of accounting fraud and improper use of offshore tax havens for stock manipulation. The group has denied all allegations.