India’s Adani Group has managed to raise $5.25bn from global banks to fund its $10.5bn acquisition of Indian cement producers, Ambuja and ACC. Adani intends to first pay Holcim $6.5bn for a 63.1% stake in Ambuja and 4.4% stake in ACC. This will make Adani a majority shareholder in both companies since Ambuja holds a 50% stake in ACC. Adani will then make mandatory open offers to minority shareholders at a price of INR 385 and INR 2300 per share for Ambuja and ACC respectively. The debt facilities consist of short term debt of $500mn, an 18-month debt of $3bn and a collective $1.75bn facility with a two year tenure. The acquisition will give Adani a production capacity of 70mn tonnes per annum (mpta), which it will try to increase to 100mpta in order to compete with industry leader Ultratech, which has a current capacity of 120mpta. Business Standard notes that strong support for Adani’s debt raise shows the “growing clout of the group among the international banking community”.
Adani’s 4.2% 2027s are trading at 93.08, up by 0.5 points to yield 5.81%.