- Key growth strategy – Rapid expansion through low-value debt
- Wachtel, Lipton, Rosen & Katz Defends Stock Market Activists
- Kext CNC serves as Global Communications Consultant to keep up the good name
- Attempt to redeem the pledged shares
- An attempt to convince investors that the group is not facing liquidity or solvency problems
- Plans to repay Rs 50 billion in new financial year
- A Financial Controller will be appointed
- Bring in global auditing
- Take investors into confidence
Mumbai: Internationally, the Gautam Adani Group claims that they have come under pressure from global shareholder activists. Plans are being designed to resist it. The actions that brought about the market crash have alarmed Adani Group, which deals in everything from ports to power.
The American law firm Wachtel, Lipton, Rosen & Katz, will speak up on behalf of Adani in response to the harm Hindenburg has done to his reputation and financial standing. Wachtel being one of the priciest, five-star law firms in the US and has experience defending clients against shareholder activists, Adani Group has turned to them for assistance.
Yes to Stock Market
In the wake of the $132 billion-costing Hindenburg disclosures, Gautam Adani is chalking out a recovery plan.
The Hindenburg investigation, which claimed that financial information belonging to Adani group companies had been manipulated, reduced the market valuation of Gautam Adani’s empire by $132 billion. About a month after abandoning a $850 million coal plant deal, cutting expenses, and paying off some debt, Gautam Adani is preparing for a comeback.
Kekst CNC- Global Communications Advisor
Kekst CNC has reportedly been hired as a worldwide communications advisor to help the Adani Group recover from the backlash and enhance the group’s reputation, according to Bloomberg News. Image Repair, a public relations company with offices in both New York and Munich, is well known for its role as a global communications advisor.
Kekst’s job is to assist the group in regaining investor confidence by addressing not just the Hindenburg claims but also other issues that cast doubt on the Adani Group’s core competencies. Kekst will collaborate closely with Adani’s Executive Management and Communications team.
Problem Resolution
The Management of Adani is acting to allay these worries. The group has let investors know that it wants to bring down the ratio of net debt to EBITDA (EBITDA = Earnings + Interest + Taxes + Depreciation + Amortisation) to under three times in the upcoming year.
As part of the group’s overall endeavour to reduce capital expenditure and save money, Adani Power Ltd. has also cancelled plans to purchase a coal plant project of DB Power Ltd. in Central India.
More of these actions may be required, according to observers, in order to resolve the problem.
The organisation has "some extremely valuable assets" that bring in money. Trinh Nguyen, a Senior Economist at Natixis SA in Hong Kong, said that if they wanted to, they could sell these assets and find purchasers.
The Adani family itself, through its units and enterprises, has started prepaying many of its borrowings and repayments in an effort to persuade investors that the firm is not experiencing liquidity or solvency concerns despite the halving of its market value.
In order to redeem committed ownership in three Adani Group companies, Gautam Adani and the Board of Directors prepaid debts totalling $1.11 billion on February 6.
The Adani Ports division has stated that it will pay off Rs. 50 billion in debt in the upcoming fiscal year, which begins in April. Since several banks decided against refinancing the debt, the business also plans to prepay a $500 million bridge loan that is due next month.
In its results statement, the group’s flagship firm Adani Enterprises Ltd stated that “the current market turbulence is transient” and expressed confidence that “the group’s entities would continue to work towards growth with moderate leverage and strategic prospects for expansion.”
Adani Group has swiftly expanded in recent years, moving beyond its coal-and port-based operations to include Airports, Green Energy, Data Centres, Cement, Digital Services, and Media.
Global Audit
In a recent financial statement, the group stated that it was thinking about hiring outside companies to investigate potential regulatory compliance problems with Adani-owned Ambuja Cements Ltd., Adani Green Energy-related transactions, and internal cost-cutting initiatives.
Additionally, the Adani Group intends to hire a financial controller to manage all of its trusts and privately held businesses.
According to experts, the Adani Group is trying to realise its primary growth strategy, which calls for rapid expansion through low-value loans.
The corporation has fully benefited from an era of inexpensive worldwide funding, which is coming to an end as a result of the growing borrowing rates for the company’s units. According to Kranti Bathini, Chief Market Strategist at Wealthmills Securities Pvt Ltd in Mumbai, they are optimistic that they will be able to pay off their debt; however, we must wait to see how they refinance it.
