Adani Group to raise over $1.5 bn to refinance Mumbai airport debt

Mumbai airport is looking to raise bonds worth $1.5 billion to refinance the debt of Mumbai’s international airport amid a slump in air travel owing to the ongoing pandemic.

The plan to raise capital comes months after the Ada­ni group announced acqu­isition of the GVK-group-owned MIAL. In February, the Adani group acquired 23.5 per cent stakes in the Mu­mbai airport from two South African investors, while the acquisition of GVK group’s 50.5 per cent stake in Mumbai airport is still in process.

Barclays Plc and JPMor­gan Chase & Co. are among banks in talks to provide funds to Adani Airport Hold­ings. Deutsche Bank AG, too, is in talks, Bloomberg repo­rted on Wednesday. 

The groups declined comment.

MIAL has a debt of about Rs 9,000 crore, including project term loan of about Rs 5,470 crore. In March, MIAL’s board approved a plan to raise 10-year rupee or foreign currency denominated bonds worth $1.5 billion to refinance the existing debt. The bonds could be listed at London, Singapore or other global stock exchanges according to the plan.

The airport is also considering availing a bridge loan which could be repaid through the proceeds of the bond. The board also appr­oved increase in the existing borrowing limit of the company from Rs 16,500 crore to Rs 25,000 crore to facilitate the capital raise.

Airports in India have been hit by the two waves of pandemic. The sharp drop in traffic has impacted both aeronautical and non-aeronautical revenue streams. In March, rating agency ICRA said Indian airports could suffer a loss of Rs 5,400 crore in FY21.

A sector expert said investors could adopt a wait-and-watch attitude before infusing capital in the aviation sector due to the ongoing uncertainties. “There needs to be a sustained trafficrecovery. There is also fear that further waves of pandemic will hit travel again,” an expert said.