Adani Ports and Special Economic Zone Ltd on Monday announced a tender offer to buy back as much as $130 million of its July 2024 bonds and equal amounts in each of the next four quarters.

The purpose of the tender offer is to partly prepay Adani Ports' near-term debt maturities and to convey the comfortable liquidity position of the company, according to its stock exchange filing.

The tender offer will expire at 5:00 p.m., New York time, on May 22, 2023.

After the successful completion of the $130 million tender offer, the company expects $520 million in debt to remain outstanding. "Post this tender offer the company intends to offer to purchase for cash approximately $130,000,000 of the outstanding notes in each of the next four quarters," the filing said.

India's largest private port operator intends to fund the buyback from its cash reserves.

"The company may choose to either accelerate or defer this plan subject its own 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 filing stated.

The cargo volumes of Adani Ports jumped 9% year-on-year to 339 million tonnes for the year ended March 31, 2023. The company's flagship Mundra Port handled a total cargo of 155 million tonnes in FY23. In April, the ports operator completed the acquisition of Karaikal Port Pvt Ltd (KPPL) after it was declared as the successful resolution applicant under the Corporate Insolvency Resolution Process (CIRP) of KPPL.

The bonds buyback marks another effort by the Gautam Adani-led ports-to-power conglomerate to regain investor confidence after U.S. short seller Hindenburg Research published a 106-page report, triggering a selloff in Adani stocks.

Fitch Ratings has affirmed 'BBB-' rating to Adani Ports' long-term foreign currency Issuer Default Rating with a 'stable' outlook.

On March 2, the Supreme Court directed the markets regulator SEBI (Securities and Exchange Board of India) to conclude its probe in the Adani-Hindenburg case within two months. The apex court also constituted an expert committee headed by a retired judge, Justice AM Sapre, to examine alleged violation of market laws by Adani Group and other listed companies. The panel comprises former SBI chairman OP Bhatt, Justice JP Devdatt, veteran banker KV Kamath, Infosys co-founder Nandan Nilekani and advocate Somasekhar Sundaresan.

The SC-appointed committee will investigate whether there has been a regulatory failure in dealing with the alleged violation of laws pertaining to the securities market. It will also suggest measures to strengthen investor awareness and the statutory and regulatory framework. The panel has been asked to submit its report to the Supreme Court in a sealed cover within two months.

Adani Ports debt buyback

Adani Ports announces $130 mn debt buyback