Adani Group seeks $750 mn from banks to pay for conversion of warrants

 

Adani Group is in talks with banks to secure approximately $750 million (Rs 6,200 crore) to fulfill payment obligations for the conversion of warrants allocated by Ambuja Cements, Financial Express reports. The deadline for the payments is April 18.

Ambuja Cements had assigned 477.4 million convertible warrants to Harmonia Trade and Investment, a unit of the Adani family. While an initial payment of Rs 5,000 crore was made by the Adani family, the remaining Rs 15,000 crore was scheduled to be paid within the subsequent 18 months. As of March this year, the family has Paid Rs 6,661 crore towards  commitment.

The Adani Group needs some $1 billion (Rs 8,336 crore) to pay a loan instalment due before April 18. Around $200-250 million (Rs 2,000 crore approx) has been secured from certain banks, with efforts underway to obtain the remaining $750 million.

Out of the total 477.4 million warrants issued, the company aims to convert approximately 265.5 million by the April 18 deadline. This conversion will elevate the promoters’ shareholding from 66.7 per cent as of March-end to 70.3 per cent.

The Adani family anticipates a nominal gain of around Rs 9,869 crore based on current stock price. The warrants were originally issued at Rs 418.87 per unit, totaling Rs 20,000 crore, whereas the current trading price of Ambuja Cements’ stock stands at approximately Rs 625.55 per share, thus valuing the converted shares at Rs 29,869 crore.

The newspaper reported that it would be economically Hard for the Adani Group to convert warrants into shares due to the substantial rise in stock prices. Adani Family ,mentioned that if there were any shortage of funds they are going to infuse funds from there family reserves.

However, the Adani Group may encounter challenges in securing the full amount from banks within the given timeframe. "Due to the Given deadline, they might face a deficit of around 10-15 per cent of the total funds, but arrangements for the remaining amount appear to have been made," said the newspaper, citing another source.