Adani Ports offers to buy back $195 mn of its 2024 dollar bond at discount

By Harry Suhartono

Adani Ports and Special Economic Zone Ltd. will buy back as much as $195 million worth of notes due 2024 at a discount to their issue price, the Indian company’s second bid for the notes in just a few months.

The company, part of the conglomerate backed by billionaire Gautam Adani, said on Wednesday it would finance the purchase from its cash reserves. For debt tendered before October 11, the company will pay $975 for every $1,000 of principal. After that, the bid price drops to $965 per $1,000.

“The purpose of the buyback offer is to partially prepay the company’s short-term debt,” the report said.

The Adani Group has been trying to restore investor confidence in recent months after a Hindenburg Research report alleging corporate malfeasance had triggered a sell-off in its bonds and shares. Adani officials have repeatedly denied the allegations.

After Hindenburg posted his charges in February at a low of 85.8 cents on the dollar, the notes have recovered and were trading at 96.4 cents on the dollar on Wednesday, prices compiled by Bloomberg show.

Bond buybacks allow companies to buy back debt through tender offers to bondholders, allowing them to retire some or all of the securities before maturity.

Adani’s announcement goes against the global trend. After interest rates rose sharply, companies started repurchasing less debt. By holding bonds with a lower coupon for longer, they do not have to take on more expensive new debt.

The bond maturing in July next year has an outstanding principal amount of $520 million, according to data compiled by Bloomberg. The offer expires on October 26 at 5:00 PM in New York.