Gautam Adani in talks with banks to borrow $600 million for gas unit: Report

Billionaire Gautam Adani’s conglomerate is seeking an offshore loan of about $600 million to refinance existing debt. The loan will be raised by Dhamra LNG Terminal Pvt, a unit of Adani Total Pvt, Bloomberg reported quoting people in knowledge of the development. The debt’s tenor could range from three to five years, with the pricing likely linked to the Secured Overnight Financing Rate, the report said.

The port-to-power group is discussing the planned transaction with lenders, including Credit Agricole, DBS Bank Ltd., BNP Paribas, Mitsubishi UFJ Financial Group Inc, and Mizuho Bank Ltd. Adani is likely to conclude the borrowing in the next two months, the Bloomberg report said. 

The conglomerate is regaining the confidence of investors since being targeted early last year by US short seller Hindenburg Research. In March, the group saw robust demand for its first public bond sale since the shortseller crisis.

Adani Total is an equal venture between Adani and Total Energies.

Adani Total Gas reported a 71.6 percent rise in Q4 net profit. Net profit climbed to Rs 168 crore in Q4 against Rs 97.9 crore in the March 2023 quarter. The leading city gas distributer's (CGD) revenue from operations in the fourth quarter of fiscal 2023-24 rose 4.7 percent to Rs 1,167 crore compared to Rs 1,114.8 crore in the year-ago period.

On the operating performance, Adani Total Gas's earnings before interest, taxes, depreciation, and amortization (EBITDA) during the March quarter rose 47.6 percent to Rs 299 crore, compared to Rs 195.2 crore in the year-ago period. The margin rose to 24.7 percent compared to 17.5 percent year-on-year (YoY).

The Union government is trying to increase the country’s ability to import LNG to lift the share of natural gas in its energy mix to 15 percent by 2030 from about 7 percent now. The move is to help lower the dependence on dirtier fossil fuels, such as coal and oil.