- Company will fund tender offer through internal accruals and cash surplus
- Purpose is to demonstrate strong financial stability and liquidity position of the company
- Buyback will stabilize current yields, which are distorted in volatile market conditions and will enhance investor confidence
- Company will from time to time carry out similar market action all the way to the maturity of the bonds, subject to market conditions
NE BUSINESS BUREAU
AHMEDABAD, NOV 14
The distribution arm of Adani Energy Solutions Ltd, Adani Electricity Mumbai Limited, on Monday announced a tender offer to buyback up to USD 120 million of its outstanding 3.949% USD 1,000 million senior secured notes due 2030.
Adani Electricity, Mumbai’s primary and most preferred power utility, is ranked India’s No. 1 power utility, as per the Ministry of Power’s 11th Annual Integrated Rating and Ranking for Power Distribution (a report prepared by McKinsey & Company and Power Finance Corporation). It services over 12 million consumers and meets over 2,000 MW of power demand of Mumbai.
In line with its commitments to investors and its consumers, Adani Electricity increased its share of power procurement from renewable sources to 30% from a baseline of 3% in 2019 and is committed to further increase it to 60% by the end of fiscal 2027. At the same time, it also reduced its GHG emission intensity by 38% from 2019.
The tender offer is being fully funded through its cash surplus and internal accruals and will help reduce the leverage of the company in line with the Adani portfolio companies to consistently improve financial matrices. The Company will from time to time carry out similar market actions all the way to the maturity of the Bonds subject to market conditions. using the available liquidity of the company.
Such market action will enhance investor confidence and support in improving current dislocation of the yield curve due to external parameters (including high interest rate environment). The buyback programme will not only stabilize the yields of its outstanding bonds but also provide a superior outcome – both to bond investors as well as shareholders.
