Are you tired of hearing about companies burdened with debt? Well, here’s some good news for a change! The Adani Group is taking an innovative approach to slash its debt by $450mn. How, you ask? By selling off its stake in the cement business. This move not only improves their financial standing but also opens up exciting possibilities for the future. Keep reading to find out more about this strategic decision and its potential impact on the industry.
Adani Group to sell cement business stake
The Adani Group plans to sell its cement business stake in a move to slash debt by $5 million. The group has been in talks with several potential buyers and is expected to finalize a deal within the next few weeks.
This move comes as part of the Adani Group’s wider plan to reduce its debt burden, which stood at around Rs 60,000 crore as of March 31, 2018. In addition to selling its cement business stake, the group is also looking to divest its port and power businesses.
If successful, the sale of the cement business will be a major boost for the group’s efforts to reduce debt. It will also help free up resources that can be used to invest in other areas of the business.
Why Adani is selling its stake in the cement business
The Adani Group plans to reduce its debt by $10 billion through the sale of its stake in the cement business. The company has been under pressure to cut its debt after its credit rating was downgraded to junk status by Moody’s Investors Service.
Adani is one of India’s largest conglomerates, with interests in coal, power, ports, real estate, and infrastructure. The group has been looking to sell non-core assets to reduce debt and focus on its core businesses.
In March 2018, Adani reached an agreement to sell a majority stake in its cement business to French construction giant LafargeHolcim. Under the deal, Adani would have sold a 74 percent stake in Adani Cement for $460 million. However, the deal was called off due to regulatory hurdles.
Now, Adani is looking to sell its entire cement business for $2 billion. The company is in advanced talks with several potential buyers, including Piramal Enterprises and Birla Corporation. A sale would help Adani meet its goal of reducing debt by $10 billion by the end of 2020.
Who is buying Adani’s stake in the cement business?
Adani Group is planning to reduce its debt by $10 billion through the sale of its cement business stake. The group is in talks with potential buyers, including private equity firms and strategic investors, to sell its entire or partial stake in the business. The move comes as part of the Adani Group’s wider plan to deleverage its balance sheet and focus on its core businesses.
The Adani Group is one of India’s leading conglomerate with interests in coal mining, power generation, ports and logistics, real estate, defence, and food and agro processing. The group has been looking to reduce its debt pile, which stood at Rs 1.63 trillion ($22.4 billion) as of March 31, 2019. It has already sold a number of non-core assets, including its stakes in Mumbai International Airport and Adani Transmission Ltd.
The sale of the cement business would be a significant step towards reducing the Adani Group’s debt. The group’s cement business consists of two plants in Gujarat with a total capacity of 8 million tonnes per annum (mtpa). The plants are operated by subsidiary companies—Adani Cement Ltd and Adani Mundra Cement Terminal Pvt Ltd.
The group is reportedly looking to sell its entire or partial stake in the business for around Rs 20-25 billion ($280-350 million). It has hired investment bank Jefferies to advise on the deal. The transaction is expected to be completed within the next few months
What will Adani do with the money from the sale?
The Adani Group plans to slash its debt by $10 million through the sale of its cement business stake, according to a report in The Economic Times.
The group has been in talks with several potential buyers, including Chinese and Japanese firms, for the past few months. It is reportedly looking to offload a majority stake in its cement business.
Adani’s move comes as part of its plan to deleverage its balance sheet and focus on its core businesses of energy and infrastructure. The group has been under pressure from lenders to reduce its debt levels.
If successful, the sale will help the Adani Group reduce its overall debt burden, which stood at around Rs 90,000 crore ($13 billion) as of March 31, 2019. It will also provide some much-needed respite to the cash-strapped group, which has been grappling with a slowdown in many of its businesses.
How will this affect Adani’s debt?
The Adani Group has announced plans to reduce its debt by $5 billion through the sale of a stake in its cement business. This move comes as the company looks to focus on its core businesses of energy and infrastructure.
The sale of a minority stake in Adani Cement will help the group achieve its goal of reducing debt by 30% over the next two years. The proceeds from the sale will be used to repay debt and invest in growth opportunities.
This move is in line with Adani’s strategy of deleveraging and divesting non-core assets. It will also help the company reduce its interest costs and free up cash for investments in growth areas.
Conclusion
The Adani Group’s plan to reduce its debt by $450mn through the sale of its stake in the cement business is a commendable move. This will help them not only pay off their debt but also give them more liquidity and resources to invest elsewhere. It is clear that Adani Group have taken a step towards financial growth and stability with this move, which should benefit both their existing stakeholders as well as potential investors in the near future
