Adani Group's container terminal subsidiary raises $300 mn via dollar bonds

Adani International Container Terminal Pvt Ltd has raised $ 300 million by issuing dollar bonds to international investors.

The issue witnessed  participation from marquee investors with interests coming in from around 220 accounts and was oversubscribed by almost ten times.

The company's 10 year bond was priced at par to yield 3 percent which is also the lowest coupon achieved by any corporate Indian issuer in the last 5 years, said a statement from the company.

The investors were attracted by its strong shareholders, APSEZ & TiL, and their combined business strengths embedded in the company, backed by the credit quality of the issuance supported by investment grade rating affirmation by all 3 international rating agencies.

The company is operating a container terminal in Mundra, with an annual capacity of handling over 3.1 million TEUs. With a continuous quay length of 1460 meters and a deep draft of 17.5 meters, the terminal is equipped to handle the largest size container carriers operating in the world

A company statement said the issuance is in line with Adani group’s philosophy to tap the capital market to re-engineer the capital structure for assets and finance them with debt extending for the life of the project. The issuance also fits perfectly into TiL’s strategy to diversify and optimise funding sources for its terminal companies around the globe.

Terminal Investment Limited (“TiL”) is the world’s 6th largest container terminal operator, moving some 34 million containers per year.

Karan Adani, CEO and Whole Time Director of APSEZ said, “The issuance is in line to the group’s capital management philosophy of re-engineering the capital structure & extending debt maturity inline to the life of asset. Our relationship with TiL is very important to us & holds the key to our strategy for making Mundra container hub for the region and AICTPL as our flagship terminal. Successful issuance demonstrates the appreciation & acceptance of level of corporate governance at the private JV level. The first note issuance by any port vertical JV company also paves the way & sets the benchmark for other JVs & subsidiary companies of the group to tap the capital market.”

Ammar Kanaan, CEO of TiL said, “Our relationship with Adani is a classic example of a commercial partnership which is based on core principles of trust, transparency, and respect. AICTPL holds a key position in our overall portfolio of terminals across all continents and is ideally located at Mundra port enabling it to be the port of choice for cargo going to North India. AICTPL’s operational performance continues to be amongst the best in the portfolio of terminals owned by us. India is a strategic place for our investment, and we foresee great opportunities going forward.”

AICTPL is turning out to be a prime destination for transshipment cargo, while the strategic location of Mundra in terms of its position on the Indian map and oceanic trade route in the Arabian Ocean makes the case for robust EXIM cargo.