Adani Group, a conglomerate based in Gujarat, India, is planning to sell a 4-5% stake in Ambuja Cement for around $450 million in order to reduce debt and restore investor confidence. According to a Financial Times report, Gautam Adani, the group’s chairman, has made a formal request to international lenders to sell the stake in the cement company, which the Adani family acquired last year for $10.5 billion from Swiss cement major Holcim.
Adani Group already owns a 63.2% stake in Ambuja Cement, and the shares are likely to be offloaded in the secondary market next week.
The sale of the stake is part of Adani’s efforts to pare down its debt and restore investor confidence in the company after a report by US short-seller Hindenburg Research in late January alleged fraud and stock market manipulation by the group. The report caused more than $150 billion in market value of the group’s listed companies to be wiped out, but Adani has denied the allegations and said it will not have any issues servicing its $24 billion of net debt.
Earlier this month, the Adani promoters sold shares worth $1.9 billion in four listed companies to Florida-based asset manager GQG Partners, which is listed in Australia. The group said it intended to “pre-pay all share-backed financing” by the end of March. Since the Hindenburg report, the Adani group has pre-paid about $2 billion of share-backed loans and made bond repayments on time, which has helped the stock prices of the group’s firms recover over the past week.
The spokesperson for Adani Group declined to comment on the latest news about the stake sale in Ambuja Cement. The plan is not finalized, and it is not disclosed who would buy the stake. However, Adani’s move to sell a part of his holding in the profitable cement company is expected to bring much-needed funds and boost investor confidence in the group.
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