Funding, Governance standards key to Adani company ratings: S&P
The S&P Global Ratings has recently released a report titled "Credit FAQ: Adani Group: The Known Unknowns" which highlights the downside risks to the Adani group's ratings.. As per the S&P Global Ratings, Access to financing and any future alteration in the assessment of governance standards at the Adani Group remain key rating-action risks for the infrastructure conglomerate. The group's efforts to improve governance and funding over the next 24 months will be in focus.
Risk includes restricted access to funding, slip ups in corporate governance, a probe uncovering "serious wrongdoing" or previously undisclosed related-party loans, cash leakages, etc. The ratings agency further adds that it is likely to take a negative rating action should any investigation uncover serious wrongdoing.
The group aims to refinance a US$4.5 billion bridge loan by the end of 2023, to buy Ambuja Cements Ltd. and ACC Ltd. S&P Global Ratings says the terms of any longer-term loan to refinance the acquisition loan would signal the funding appetite of domestic and international banks to lend against cash flows from operating entities. It shall also review the group's ability to raise equity and debt, both via private placement or through public debt markets.
