Adani Group says it has sufficient cash and no need to worry about debt repayments

Adani Group said on Monday it had enough cash to repay the debts of all its companies over the next 12 months, its first move since U.S. federal prosecutors last week indicted founder Gautam Adani. One of the group’s first statements.

The group also released two presentations detailing its financial results and credit profile, a move seen as an effort to calm investor nerves. Adani Group said in its press release that consolidated cash flow over the past 12 months exceeded projected annual debt repayments over the next 10 financial years. The company said this underscored its ability to manage its debt repayment obligations with earnings.

“Each company in the portfolio has sufficient liquidity to meet all debt service needs for at least the next 12 months,” the release said. “Cash reserves currently stand at $53,024 crore – 20.53% of total debt. This amount is sufficient to meet debt service needs for approximately the next 28 months. “

The Adani Group includes 11 listed companies and has a cumulative earnings before interest, tax, depreciation and amortization (Ebitda) of $83,400 crore in the last 12 months. This is 17% higher than the corresponding figure in the previous year. During this period, these businesses generated funds from operations (FFO) $589.08 billion rupees, a year-on-year increase of 28%. Adani Group said its upcoming debt maturities in each year to fiscal 2034 are lower than the FFO generated in the last 12 months.

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The massive ports-to-edible oils group has total long-term borrowings $$2.38 trillion, with cash balances of $53,024 crore. This means that long-term net debt is $$1.85 trillion, with a net debt to Ebitda ratio of 2.46. The group also has $Short-term working capital debt is Rs 20,724 crore.

International funds are cheaper

While Adani Group brushed aside concerns about its ability to repay loans, questions remain about its ability to borrow new capital overseas. half of the group $Long-term debt borrowed from overseas reached 2.38 trillion, including bank loans and bonds.

Overseas debt, obtained at a relatively low cost compared to domestic borrowing, has funded Adani Group’s rapid growth over the past decade.

“With the exception of (Adani Green Energy), we understand that Adani companies do not need to raise additional capital at this time. If they do need additional financing, this cloud [sic.] “This will limit their ability to access foreign capital,” GQG Partners, a major investor in Adani Group of Companies, said in a note to investors on Thursday.

GQG said: “However, there is currently no indication that domestic banks, especially Indian state-owned banks, will stop providing credit to Adani Group.” Domestic bank loans account for 42% of Adani Group’s long-term debt, of which State Bank of India is the largest domestic bank. lending institution. Domestic capital markets account for another 5% of Adani’s long-term borrowings.

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Adani Group did not respond to a detailed questionnaire sent on Sunday.

The U.S. Department of Justice and the U.S. Securities and Exchange Commission have charged Gautam Adani, Adani Green Energy executive director Sagar Adani and the company’s managing director Vineet Jain with allegedly bribing Indian government officials in exchange for favorable solar power Power Supply Agreement. Federal prosecutors say they committed securities fraud by withholding this information from investors when they raised loans and sold bonds in the United States. Adani Group has denied all accusations and said it would seek legal recourse.