Adani to launch $2-billion dollar bonds

Issue in two months for Australian projects; group to invest another $15 billion in infrastructure projects by 2020

The Adani Group is looking at the option of raising close to $2 billion by way of dollar bonds, to swap the earlier loan taken from banks to acquire Australian assets, said Gautam Adani, chairman.

The bonds will be launched in the next two months and the company will soon appoint bankers for the issue, he said. This is part of the group's plan to reduce finance costs.

The promoter family has taken over the Australian assets from the listed company, Adani Port & SEZ Ltd, to reduce the debt burden on the listed entity. The Adani Group purchased coal assets and a major port in Australia in 2010 as part of a mining, rail and port development project. This awaits environmental clearances from local authorities.

Adani said the group was looking at bringing in a good engineering-procurement-construction contractor as a joint venture partner for the 300-km railway project. "We are waiting for the environmental clearances. Once we have this in place, we will start construction in Australia by year-end," he said.

The Adanis are planning to spend as much as $4.5 billion in mine development. Of this, Adani said, the Group had already spent up to $900 million as equity contribution. "We will spend another $300-400 mn as equity and the rest we will raise as debt," he said.

Apart from Australia, they plan to invest $15 bn in various infrastructure projects in India and abroad. Adani said the group was looking at setting up two large port projects in eastern India and was in talks with various state governments to select a site.

"By this fiscal-end, we will be India's largest port company and cross 100-million-tonne capacity in Mundra (Gujarat). Besides, we will double our port capacity by 2016-17 as the Dahej and Hazira expansion will come into stream. Similarly, we will produce 10,000 Mw of power by March next year and increase it to 20,000 Mw by 2020," said Adani, a first-generation entrepreneur from Gujarat.

All this capital expenditure is to be financed by debt, getting equity partners into the projects and internal accrual. The high promoter stake in various listed companies will come in handy to raise funds by small divestments, said Adani.

On the rupee's impact, he said the fall was not a company-specific issue but a larger one. "Indians are spending so much of money in gold imports, which is causing burden on the capital account deficit. The need of the hour is to curb gold imports and increase exports," he said.

STRIDES ACROSS THE GLOBE

• The Adani Group bought coal mines and a major port in Australia in 2010 as part of mining, rail and port development plans in the country
• Once it gets environmental clearances, the group will start working on its 300-km railway project in Australia
• Adani is planning to spend $4.5 billion there in mine development. Of this, the group has already spent up to $900 million as equity contribution
• Besides, Adani is planning to invest $15 billion in infrastructure projects in India and abroad