February 25, 2024
Adani Cement Refinances USD 3.5 Billion From 10 International Banks, Terming Out The Acquisition Finance Facility By A Tenor Of 3 Years

Adani Cement Refinances USD 3.5 Billion From 10 International Banks, Terming Out The Acquisition Finance Facility By A Tenor Of 3 Years

Terming Out The Acquisition Finance Facility By A Tenor Of 3 Years

Adani Cement Refinances USD 3.5 Billion From 10 International Banks: Adani Cement, in collaboration with Endeavour Trade and Investment Ltd, is thrilled to announce the successful conclusion of a refinancing program for its acquisition debt related to Ambuja and ACC. The facility, valued at USD 3,500 million, has been secured from a consortium of international banks, highlighting Adani’s impressive access to the global financial market and the company’s substantial liquidity position. This milestone underscores the organization’s unwavering commitment to financial stability and sustainable growth. Notably, this refinancing initiative is expected to yield substantial cost savings of approximately USD 300 million for Adani Cement.

Adani Cement: A Key Player in the Indian Cement Industry

Adani Cement stands as the second-largest cement player in India. Its acquisition of Ambuja and ACC, valued at USD 6.6 billion, is among the most significant transactions in India’s infrastructure and materials sector. This acquisition, completed in September 2022, signifies Adani Cement’s strategic growth and commitment to fortifying its position in the industry. The USD 3.5 billion refinancing initiative aligns with the capital management plan outlined in September 2022, setting the stage for a phased deleveraging process at Adani Cement. As a result, the Net Debt to EBITDA ratio for its cement vertical now stands at under 2x.

Adani Cement Refinances USD 3.5 Billion From 10 International Banks, Terming Out The Acquisition Finance Facility By A Tenor Of 3 Years
Adani Cement Refinances USD 3.5 Billion From 10 International Banks, Terming Out The Acquisition Finance Facility By A Tenor Of 3 Years

Expanding Capacity and Leveraging Synergies

Ambuja Cements and ACC presently boast a combined installed production capacity of 67 MTPA, with plans to expand to an impressive 100 MTPA by 2025 through the acquisition of Sanghi Cement. Both Ambuja and ACC are renowned brands in India, benefiting from extensive manufacturing and supply chain infrastructure. The strategic integration with the broader Adani infrastructure platform enables synergies in critical areas, including raw materials, renewable power, and logistics. Leveraging the vast experience and deep expertise of Adani Portfolio companies, the EBITDA per ton has surged from INR 340 per ton in the quarter ending September 2022 (immediately following the acquisition) to INR 1,253 per ton in the quarter ending June 2023, indicating embedded deleveraging through increased coverage positioning.

Robust Financial Arrangement

The USD 3,500 million refinancing was coordinated with the participation of 10 prominent international banks. DBS Bank, First Abu Dhabi Bank, Mizuho Bank, and MUFG Bank served as Mandated Lead Arranger and Bookrunners and Underwriter for the transaction. Additionally, Barclays Bank PLC, BNP Paribas, Deutsche Bank AG, ING Bank, Sumitomo Mitsui Banking Corporation, and Standard Chartered Bank acted as Mandated Lead Arrangers and Bookrunners. The legal aspects of the financing were overseen by Cyril Amarchand Mangaldas, Latham and Watkins as Borrower’s counsel, while Allen & Overy LLP and Talwar Thakore and Associates acted as legal counsels to the lenders.

This refinancing initiative is a testament to Adani Cement’s financial prudence, strategic foresight, and the faith that global financial institutions have in the company’s sustained growth trajectory. With a commitment to excellence and a strategic vision for the future, Adani Cement is poised to further strengthen its position as a key player in the Indian cement industry.

Final Conclusion about the Press Release: Adani Cement Refinances USD 3.5 Billion From 10 International Banks

In conclusion, the successful refinancing of USD 3.5 billion by Adani Cement from 10 international banks is a resounding testament to the company’s commitment to financial stability and its strategic vision for growth. This achievement reflects the company’s strong business performance, as evidenced by substantial improvements in EBITDA per ton following the acquisition of Ambuja and ACC. The substantial cost savings of approximately USD 300 million derived from this initiative underscore Adani Cement’s prudent financial management. This refinancing positions Adani Cement as a significant player in the Indian cement industry, with a solid foundation for future growth, and reaffirms its credibility and confidence in the global financial market.

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