Adani Electricity To Buy Back Up To $120 Million Bonds

Adani Electricity Mumbai Ltd. announced a tender offer to buy back up to $120 million of its outstanding $1,000 million senior secured notes.

The distribution arm of Adani Energy Solutions Ltd. will buy back the outstanding 3.949% $1,000 million, senior secured notes that are due in 2030, which will be funded via internal accruals and cash surpluses, it said in its exchange filing on Monday.

The purpose of the buyback is to demonstrate strong financial stability and liquidity position, and it will help reduce the leverage of the company in line with the Adani portfolio companies, it said.

The company will from time to time carry out similar market actions all the way to the maturity of the bonds, subject to market conditions and using the available liquidity, the statement said.

This will help in stabilising the current yields, which are distorted by volatile market conditions, and will also enhance investor confidence, it said.

The company had earlier raised funds through two USD bond offerings, viz., $1 billion in February 2020 and GMTN–$300 million sustainability-linked notes during July 2021, according to a statement.

The 10-year $1 billion 3.949%-bonds was oversubscribed 5.9 times during its issue. It carried a rating of 'Baa3' and 'BBB-' by Moody’s and Fitch Ratings, respectively, and was the first-ever investment grade rated to a distribution company in India.

Adani Electricity has increased its share of power procurement from renewable sources to 30%, from a baseline of 3% in 2019 and is committed to further increase it to 60% by the end of fiscal 2027, the statement said.

At the same time, the company also reduced its greenhouse gas emissions intensity by 38% from 2019.

Shares of Adani Green Energy closed 0.84% lower at Rs 940.15 apiece, as compared with a 0.42% decline in the benchmark NSE Nifty 50 on Monday.

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