Adani Ports and Special Economic Zone Ltd (adaniports-share-price-363228">APSEZ) on Wednesday said that it will buy back up to $195 million of its notes due in 2024 at a price below their original issue. The company said it has started a tender offer to buy the outstanding 3.375 per cent senior notes due 2024 for up to $195 million in cash.
Bond buybacks allow companies to repurchase debt through tender offers to bondholders, enabling them to retire some or all of the securities ahead of their due date.
The purpose of the Tender Offer is to partly prepay the Company’s near-term debt maturities. After the successful completion of this Tender Offer, the Company expects US$325,000,000 Notes to remain outstanding (“Outstanding Notes”), the company said in a regulatory filing on Wednesday.
The company anticipates that the $325 million notes will continue to be outstanding following the conclusion of this tender offer.
“The company intends to fund the notes accepted for purchase in the tender offer from its cash reserves," said Adani Ports in its filing.
Shares of Adani Ports were trading at Rs 826.45, up by 0.69 per cent, at 10 AM on Wednesday.
In May 2023, the company said that it would buy roughly 20 per cent of the issued notes' principal amount for cash over the following four quarters, for a total purchase price of $130 million in cash. Around 30 per cent of the issued notes' principal amount, or up to $195 million in aggregate principal, is what the company is buying in this second tranche for cash.
“The company reiterates its intention that, subject to market conditions and its liquidity position, it will continue purchasing for cash the Outstanding Notes over the next three quarters in line with its announcement in May 2023. The Company may choose to either accelerate or defer this plan subject to market conditions, and further subject to the terms, including the pricing, to be separately announced for each of such tranches," said the company filing.
The tender offer will expire at 5 pm, New York time, on October 26, 2023, unless extended or earlier terminated, added the company.
The company has engaged Barclays Bank, DBS Bank, Emirates NBD Bank, First Abu Dhabi Bank, Mizuho Securities (Singapore), MUFG Securities Asia Singapore Branch, SMBC Nikko Securities (Hong Kong) Limited, and Standard Chartered Bank to serve as dealer managers for the tender offer.
In the last six months, the company stock rose 31 per cent versus 14 per cent of the Sensex benchmark. After the Hindenburg report was released the stock fell to its 52-week low of Rs 394 apiece on March 3. It touched its 52-week high of Rs 916 per share on November 16, 2022.
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