With the hopes of acquiring Container Corporation of India Ltd. (CONCOR), Adani Ports and Special Economic Zone Ltd. (APSEZ) has been aggressively building itself a war chest of debt and cash, reveals Karan Adani, Chief Executive Officer, APSEZ.
APSEZ’s gross debt has risen by INR 10,595 crores to INR 44,996 on September 30 from ₹34,401 crores on March 31, while its cash and cash equivalents have gone up to INR 9,434.19 crores on September 30 from INR 3,310.74 crores on March 31.
Karan Adani, during an earning call to an analyst, reasoned the same by calling it the company’s plan and preparation of acquiring CONCOR.
“Whatever debt we have raised is mainly for CONCOR,” he said.
Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey had told the media earlier last month that CONCOR’s strategic sale is not happening this year. However, APSEZ anticipates the government to flag off the privatization process in April next year.
That is what we believe it would be. From our point of view, we are building up the reserves from now, so that by the time the acquisition concludes, we are not stretched on the balance sheet, in terms of the numbers as well as on the ratios. More importantly, we want such a large acquisition to be sort of a normal course of business, rather than being stretched out at the last moment. So, we are just preparing ourselves not just in terms of the cash and the balance sheet, but even in terms of the organization and strategy to use this next six months to prepare ourselves forbidding.”~ Karan Adani, CEO, APSEZ
In July, APSEZ raised $750 million in US dollars bonds, which was the first-ever issuance by any Indian infrastructure company for unsecured dual-tranche notes of 10.5 years and 20 years maturity at a fixed coupon of 3.8% and 5%, respectively. The issuance has helped APSEZ to increase its debt maturity profile to 7.01 years on September 30 from 5.98 years on March 31 and is touted as a reflection of the company’s ability to raise capital from the international market at a lower cost and with a longer tenure.
APSEZ’s net debt currently stands at ₹31,307 crores.
“With the Concor acquisition, the net debt position will remain around ₹31,000 because we are using the cash (also) to fund the acquisition,” Karan added.