Adani Cement announced on Friday that it had refinanced a USD 3.5 billion loan it took to acquire ACC and Ambuja Cement, indicating the growing trust of international institutions in the conglomerate.
The firm said in a statement that as many as 10 international banks refinanced the facility.
“The re-financing program of USD 3.5 billion has been concluded with a clutch of international banks with debt maturity of up to 3 years, testifies the strong support and access to capital, supplementing the solid capital prudency adopted at all portfolio companies,” it said.
“This showcases Adani’s robust access to the global financial market and strong liquidity position. This achievement reflects our commitment to financial stability and growth.” The refinance, it said, will lead to cost saving of USD 300 million.
Adani Cement had in September last year acquired Ambuja and ACC for USD 6.6 billion deal, making it the second largest cement maker in the country.
“The USD 3.5 billion facility marks the continued execution of the capital management plan outlined in September 2022 that will see step wise planned deleveraging of Adani Cement, with cement vertical net debt to EBITDA now under 2x,” it said.
Ambuja Cement and ACC currently have a combined installed production capacity of 67 million tonnes per year, which will increase to 100 million tonnes by 2025 with the announced acquisition of Sanghi Cement.
ACC & Ambuja are among the strongest brands in India with immense depth of manufacturing and supply chain infrastructure.
“These along with benefit from synergies with the integrated Adani infrastructure platform, especially in the areas of raw material, renewable power and logistics, where Adani Portfolio companies have vast experience and deep expertise has resulted in to improvement in the EBITDA per tonne from Rs 340 per tonne in quarter ended September 2022 (immediately after the acquisition) to Rs 1,253 a tonne in the quarter ending Jun-23 which represents embedded deleveraging through elevated coverage positioning,” it said.
The acquisition was financed by USD 3.5 billion in facilities from ten international banks. DBS Bank, First Abu Dhabi Bank, Mizuho Bank, and MUFG Bank served as mandated lead arrangers, bookrunners, and underwriters to the transaction.
In addition, 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 for the transaction.
Cyril Amarchand Mangaldas, Latham and Watkins acted as Borrower’s counsel for the financing with Allen & Overy LLP, Talwar Thakore and Associates acting as legal counsels to the lenders.
