Adani Ports To Prepay Rs 5,000 Crore Debt In A Bid To Improve Leverage Ratio And Address Market Concerns

Adani Ports and Special Economic Zone Ltd (APSEZ), India’s largest private Ports & Logistics company and the flagship division of the ports-to-power conglomerate Adani Group, said on Tuesday (Feb 7) that it will significantly reduce its debt leverage.

The announcement comes a day after the billionaire and his family prepaid over Rs 9000 crore ($1.11) billion worth of borrowings backed by shares in three group companies, including Adani Ports, to address the turbulence in share price and allay concerns of investors. Gautam Adani and his family own 65% in Adani Ports. With the prepayment of shared-backed borrowing, the promoters’ pledged holding in Adani Ports has come down to 5% from the earlier  17%

"Continuing with our growth journey, APSEZ is targeting FY24 EBITDA of Rs 14,500-15,000 Cr. Besides an estimated capital expenditure of INR 4,000-4,500 Cr, we are considering total loan repayment and prepayment of around Rs 5,000 Cr, which will significantly improve our Net Debt to EBITDA ratio and bring it closer to 2.5x by March 24” Karan Adani, the CEO of APSEZ said.

The company had a gross debt of Rs 45,534 crore as of December 31, 2022 .Net debt, which is net of cash, stood at Rs 39,277 crore. Bulk of Adani Ports’ s debt is denominated in foreign borrowings.

The company said that its port business will be bolstered in the coming year with the addition of  20 MMT capacity of Haifa Port Company in Israel, a new container terminal at Gangavaram (6 lakh TEU), additional liquid storage tanks at Katupalli, a 5 MMT LNG terminal at Dhamra port in Odisha that will be commissioned in April 2023, Karaikal Port (17.5 MMT), for which APSEZ has received the LoI, subject to NCLT approval.

APSEZ is currently the largest commercial ports operator in India accounting for nearly one-fourth of the cargo movement in the country. It has presence across 13 domestic ports in seven maritime states of Gujarat, Maharashtra, Goa, Kerala, Andhra Pradesh, Tamil Nadu and Odisha