APSEZ to tap dollar bond market in 2020

ADANI PORTS HAS STARTED WORKING ON ANOTHER DOLLAR BOND ISSUANCE, WHICH MAY HIT THE MARKET AS EARLY AS THE FIRST QUARTER OF 2020

NEWDELHI: After tapping the dollar bond market twice in 2019, Gautam Adani’s ports business Adani Ports and Special Economic Zones (APSEZ) is preparing for a fresh issue in the new year, two people aware of the development said.

In July, Adani Ports raised $650 million to buy back bonds of a similar amount maturing in 2020, and in June, it raised $750 million through a separate bond sale.

“Adani Ports has started working on another dollar bond issuance. It is likely to hit the market as early as the first quarter of calendar year 2020,” said the first of the two people cited above, both of whom spoke under condition of anonymity.

According to the second person, the funds will be used for capital expenditure, unlike the previous two rounds, which were aimed at refinancing existing foreign and domestic debt of the ports operator.

The port operator has lined up significant expansion plans till financial year 2025, which will see the company expand its cargo handling capacity at four of its ports—mundra, Hazira, Dhamra and Kattupalli—grow from a collective capacity of 345 million tonnes to about 477 million tonnes, according an October investor presentation by the company.

It is also developing a container terminal port in Myanmar and several multimodal logistics parks.

Adani Ports has outlined a capex plan of approximately ₹17,500 crore for these expansions.

Emails sent to the Adani group remained unanswered.

The year 2019 has seen the group aggressively tap the dollar bond markets amid favourable interest rates and availability of capital.

“The Adani group has been sort of a darling of the bond market in 2019. They have seen subscription of three-four times for all the deals that they took to the market,” said the second person cited above.

Adani group companies issued five dollar bond offerings, including two bonds by the ports operator, totalling about $2.76 billion.

Apart from the port company, Adani’s renewable energy business Adani Green Energy Ltd raised $500 million in May and followed it up with another bond issuance of $362.5 million in October.

Adani Transmission, the power transmission and distribution business of the group, raised $500 million in November.

Mint reported on September 29 that Adani Electricity Mumbai Ltd, the city electricity distribution business of the group housed under the transmission arm, is also planning to refinance part of its existing domestic debt by raising bonds in the offshore market.