Adani Group Joint Venture In Talks For First Offshore Loan Since Hindenburg Report

Gautam Adani-led Adani Group’s joint venture with EdgeConneX is in talks with about half a dozen banks for a loan of about $220 million, according to a report

Gautam Adani-led Adani Group’s joint venture with EdgeConneX is in talks with about half a dozen banks for a loan of about $220 million, according to a report by news agency Bloomberg. According to the report, this would be the conglomerate’s first offshore borrowing since it was targeted by US-based shortseller Hindenburg Research.

According to sources privy to the development said data center provider AdaniConneX Private Ltd would use the money for capital expenditure, with a five year tenor under discussion. This loan may be signed in the next few weeks, the sources said. A representative for Adani Group, however, declined to Bloomberg’s request for comment.

The Indian conglomerate has been forced to reevaluate its ambitions after US-based Hindenburg accused it of stock manipulation and accounting fraud. While the group has denied the allegations, its stock and bond prices slumped.

Flagship Adani Enterprises Ltd. in January shelved a plan to raise as much as Rs 10 billion ($121 million) in what would have been its first public sale of bonds.

Data compiled by Bloomberg show no US dollar bonds and loans taken out by Adani Green Energy Ltd., Adani Ports and Special Economic Zone Ltd. and Adani Enterprises Ltd. since the report was released.

Adani Group executives met US investors as part of its plans to market privately placed bonds of as much as $1 billion in two tranches this year, Bloomberg reported late last month, citing people familiar with the matter.

Adani Group, which racked up one of India’s heftiest debt loads to fund fresh areas of growth, is pulling back from petrochemicals and is unlikely to go ahead with a planned $4 billion greenfield coal-to-polyvinyl chloride project in Mundra, citing sources news agency Bloomberg reported.

Hindenburg’s allegations of extensive, years-long corporate fraud at Adani Group have wiped out about $125 billion in market value since January.

The conglomerate is also dialling back on ambitions to dive further into aluminium, steel and road projects, according to the report. Instead, Adani will revert his focus to core projects. They include power generation, ports and newer green energy initiatives, according to the sources.