(Source from Reuters/Alamy)
India’s Adani Group, which canceled the paid-in capital increase after being attacked by short selling by Hindenburg Research in the U.S., has decided to reduce its capital expenditure plan, Bloomberg News and others reported on the 6th, citing local daily Mint.
Adani Group has decided to adjust the capital expenditure plans of some affiliates and extend the period of setting the growth target from 12 months to 16-18 months.
Sources familiar with the matter said they will also raise funds necessary for investment by attracting internal funds and private equity investment.
Initially, Adani Group tried to raise $2.5 billion through a paid-in capital increase by its flagship Adani Enterprise, but canceled it due to a sharp drop in stock prices following Hindenburg’s short selling attack.Adani Group also decided to provide additional collateral to the financial sector, and the financial sector reportedly decided to allow unused loans within the set loan limit.Mint explained that India’s financial sector made the decision due to concerns over the possibility of Adani Group’s default.
Currently, Adani Group is known to be able to borrow about $1.5 billion without additional settings.Adani Group has seen its affiliates’ listed shares fall by more than $100 billion (about 125 trillion won) due to a plunge in stock prices since Hindenburg’s report was released on the 24th of last month.Meanwhile, international credit rating agency Standard & Poor’s (S&P) lowered its credit rating outlook for Adani Port, Special Economic Zone, and Adani Electric among Adina Group affiliates, whose stock prices plunged due to the Hindenburg short selling attack, from “stable” to “negative.”
Moody’s earlier warned that there was no change in the credit rating of Adani Group’s affiliates right away, but that the recent fall in stock prices of affiliated listed companies could undermine Adani Group’s ability to raise funds. Fitch said he was keeping an eye on Adani Group’s situation, but he did not see any real changes in Adani Group’s cash flow outlook right away.
TED PARK
ASIA JOURNAL
