Adani Airport Holdings, which will formally own a majority in MIAL, is now in talks with a global consortium of foreign lenders, including Standard Chartered Bank, Barclays, Deutsche and JP Morgan, to raise more than $1 billion in offshore loans. Proceeds will be used to repay existing local top-ranked public and private banks, said two people involved in the exercise.
Adani Airport Holdings has already acquired 23.5% of Mumbai International Airport Ltd.
The Adani Group, which is soon expected to take over the GVK-led Mumbai International Airport (MIAL), plans to refinance its debt at lower rates with overseas funds, people aware of the talks told ET. Adani Airport Holdings, which will formally own a majority in MIAL, is now in talks with a global consortium of foreign lenders, including Standard Chartered Bank, Barclays, Deutsche and JP Morgan, to raise more than $1 billion in offshore loans. Proceeds will be used to repay existing local top-ranked public and private banks, said two people involved in the exercise.
According to the latest annual report of Adani Enterprises, the total debt of MIAL taken over by Adani was Rs 11,139 crore as of March. Of that, Adani is aiming to refinance Rs 8,250 crore (about $1.1 billion), a move that will reduce funding costs by at least 1 percentage point on a fully hedged basis, sources familiar with the matter said.
It has made an additional capital commitment of Rs 2,807 crore.
Adani Group did not respond to ET’s mailed queries.
“The loan could be against shares pledged. The structure is work-in-progress,” said one of the persons cited above.
Adani Enterprises as an incubator owns 100% of its airports holding company, Adani Airport Holdings Ltd. Adani Airport Holdings has already acquired 23.5% of Mumbai International Airport Ltd (MIAL) from shareholders Bidvest and Airports Company South Africa, according to the annual report.
It aims to take over 50.5% additional shares through the conversion of majority shareholder GVK’s debt into equity shortly. MIAL owns 74% of the Rs 16,000-crore airport project planned in Navi Mumbai, for whose takeover it recently received a nod from the nodal body CIDCO.
The loan could be priced after adding a mark-up over the London Interbank Offered Rate (LIBOR), a key global rate gauge that is now at historical lows.
In January, rating company CRISIL downgraded MIAL long term loans to ‘default’ category as the airport company sought recast of those debts.
The proposed loan could be of two-year maturity, which may be extended by issuing long-term overseas bonds.
“By that time, Adani shall have reshaped MIAL raising its creditworthiness, a key factor for issuing long-term bonds,” said a person involved in the matter.
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