Ahmedabad (Gujarat) [India] : Adani Cement, a subsidiary of the Adani Group, has completed a refinancing program, securing a financing package of USD 3,500 million from 10 international banks.
According to a press release by Adani Group, the refinancing, executed through Endeavour Trade and Investment Ltd, is aimed at terming out the acquisition finance facility for Ambuja and ACC, two major cement brands in India, by a tenor of 3 years.
The refinancing program underscores Adani Cement’s robust access to the global financial market and its strong liquidity position.
The funds have been raised from a group of international banks and will result in an estimated cost saving of approximately USD 300 million for Adani Cement. This achievement aligns with Adani Cement’s commitment to financial stability and growth.
Adani Cement, currently the second-largest cement player in India, completed the acquisition of Ambuja and ACC, valued at USD 6.6 billion, in September 2022.
This acquisition marked a significant milestone in the infrastructure and materials sector. The refinancing initiative forms a part of Adani Cement’s capital management plan outlined in September 2022, focusing on stepwise deleveraging.
The refinancing deal was orchestrated by several leading banks including DBS Bank, First Abu Dhabi Bank, Mizuho Bank, MUFG Bank, Barclays Bank PLC, BNP Paribas, Deutsche Bank AG, ING Bank, Sumitomo Mitsui Banking Corporation, and Standard Chartered Bank.
Cyril Amarchand Mangaldas and Latham and Watkins acted as Borrower’s counsel for the financing, while Allen & Overy LLP and Talwar Thakore and Associates served as legal counsels to the lenders.
Adani Cement’s acquisition of Ambuja and ACC positioned it with a combined installed production capacity of 67 million metric tonnes per annum (MTPA), with plans to expand to 100 MTPA by 2025, including the recently announced acquisition of Sanghi Cement.
The integration of these brands with the Adani infrastructure platform has significantly improved operational efficiencies, leading to an increase in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) to INR 1,253 per ton in the quarter ending June 2023, compared to INR 340 per ton immediately after the acquisition in September 2022.