Adani Green’s Game-Changing Refinancing Plan Set to Unveil by End of FY23: Insider Report Reveals Exciting Details!

Adani Green’s Game-Changing Refinancing Plan Set to Unveil by End of FY23: Insider Report Reveals Exciting Details!

Adani Green, one of India’s leading renewable energy companies, has been making waves in the industry for its innovative and sustainable approach to power generation.

And now, according to a recent insider report, the company is gearing up to unveil a game-changing refinancing plan that could have significant implications for the future of the industry.

It is expected to be disclosed by the end of FY23, Adani Green’s refinancing plan is rumoured to be a massive undertaking that could involve a wide range of stakeholders, including financial institutions, bondholders and other investors.

An Overview of Adani Green’s Game-Changing Refinancing Plan.

While such details of the plan remain shrouded in secrecy, analysts and industry insiders are already speculating about the potential impact it could reflect in the company’s working and generation of the renewable energy market as a whole.

After the harm to reputation of Adani Group on the basis of Hindenburg Research report, the Adani Group has engaged the services of several banks to coordinate calls with bond investors.

These selected banks will be responsible for arranging communication with investors having fixed-income on behalf of Adani Group, Adani Green Energy Ltd, and Adani Transmission within the coming week.

According to media reports, these calls are decided to take place on 16th and 21st of February.

The responsible banks for organising these interactions include Barclays Plc, BNP Paribas SA, DBS Bank Ltd, Deutsche Bank AG, Emirates NBD Capital, ING Groep N.V., MUFG, Mizuho, SMBC Nikko, and Standard Chartered Bank.

These will be refinanced through private placement using amortisation of 15 years.

How Adani Green’s Refinancing Plan Can Boost Renewable Energy Expansion ? 

Adani Green, Adani Group’s subsidiary, is the largest renewable energy organization. Having almost a total installed capacity of over 15 GW, Adani Green is actively expanding its renewable energy footprint and achieving its goal to become the global leading solar power company.

The company’s recent refinancing plan is evident that it possesses the potential to skyrocket its renewable energy expansion efforts significantly.

The refinancing plan is planned to reduce Adani Green’s interest costs along with extending the maturity of its existing debt.

The money to be raised via the refinancing plan will be allocated to the repayment of existing debt and to finance fresh projects in relevant industries.

1. How will it help with Interest costs?

The primary advantage of the refinancing plan is that it can help Adani Green reduce its interest costs. By replacing high-interest debt with lower-cost debt, the company can improve its profitability and generate more cash flow. This, in turn, can help the company finance new renewable energy projects and expand its operations.

Moreover, Adani Green’s recent rating upgrade by Moody’s and S&P Global Ratings is expected to lower its borrowing costs, making the refinancing plan even more attractive. The higher ratings reflect the company’s strong financial profile, which is underpinned by a diversified portfolio of assets and a track record of successful project execution.

2. Extending maturity via Refinancing –

Another key benefit of the refinancing plan is that it can extend the maturity of Adani Green’s existing debt. The longer maturity profile will provide the company with greater financial flexibility and reduce its refinancing risk. With a longer debt profile, the company will have more time to generate cash flows from its renewable energy projects and pay off its debt.

3. Expanding is an aim too!

The refinancing plan can help Adani Green finance new renewable energy projects. The company has set an ambitious target of achieving a total installed capacity of 25 GW by 2025. To achieve this target, Adani Green will need to invest heavily in new projects, both in India and globally.

With the acquisition of funds raised by the refinancing plan, Adani Green will have the necessary capital to finance and start incredible renewable energy projects. This will not only help the company achieve its expansion targets, but it will also support the growth of the renewable energy sector in India and globally.

Global achievements of Adani Green’s during the past!

1. In January 2021, Adani Green became the world’s largest solar power developer, with a total renewable energy capacity of over 14,800 MW.

2. The company has won several bids to develop renewable energy projects in India, including the world’s largest solar bid, an 8 GW project in Rajasthan.

3. Adani Green has also expanded its renewable energy operations globally. In 2020, the company acquired a 205 MW solar power project in Australia, which is one of the largest solar projects in the country.

4. In 2020, Adani Green also won a bid to build a 600 MW wind power project in Saudi Arabia, which is the company’s first renewable energy project in the Middle East.

5. Adani Green has been recognized globally for its efforts in promoting renewable energy. In 2020, the company was awarded the prestigious United Nations Global Climate Action Award in the “Climate Neutral Now” category.

The main concern of refinancing after Hindenburg’s report.

There are many aims this refinancing can for but the real and most critical aim right now for the Adani Greens is their reputation loss and debt repayment due date. 

Though the plan is not yet announced, management has disclosed that it is seeking to cut down the Adani group’s net debt to below three times EBITDA (Earnings before interest, taxes, depreciation and amortization) next year. Whereas the current ratio is 3.2 times.

Almost 390 million USD in debt will be due in the coming next 12 months to the company for repayment. For which they are planning to use generations from revenue. 

The actions that were disclosed on Thursday evening were taken in response to Adani Power’s recent announcement that they will not be moving forward with their intended purchase of DB Power. DB Power is responsible for managing a coal-fueled power plant with a capacity of 2×600 MW located in Chhattisgarh.  

Expert’s opinion about refinancing – is it a trap? 

Without a proper plan, it is hard to judge what impact this refinancing will make. From the recent data available it can be concluded that this refinancing can be generally seen as a positive development that could have a beneficial impact on the renewable energy sector in India.

Benefits for the country are – 

1. Adani Green Energy’s refinancing will improve its financial position.

2. The refinancing could boost the renewable energy sector in India.

3. The increased investment in renewable energy will help reduce India’s dependence on fossil fuels.

4. The successful refinancing may increase foreign investors’ confidence in the Indian economy and its renewable energy sector.

5. This could lead to increased foreign investment in the sector, providing a further boost to the economy.

edited and proofread by nikita sharma