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Adani group seeks $1 billion to refinance Mumbai airport debt

Airports in India have been hit by the two waves of pandemic. The sharp drop in traffic has impacted both aeronautical and non-aeronautical revenue streams. In March, rating agency ICRA said Indian airports could suffer a loss of INR 5,400 crore in FY21.

Adani group seeks $1 billion to refinance Mumbai airport debt
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The Adani Group, which is soon expected to take over the GVK-led Mumbai International Airport (MIAL), plans to refinance its debt at lower rates with overseas funds.

Mumbai airport is looking to raise bonds worth $1.5 billion to refinance the debt of Mumbai’s international airport amid a slump in air travel owing to the ongoing pandemic.

The plan to raise capital comes months after the Adani group announced the acquisition of the GVK-group-owned MIAL. In February, the Adani group acquired 23.5 per cent stakes in the Mumbai airport from two South African investors, while the acquisition of GVK group’s 50.5 per cent stake in Mumbai airport is still in process.

According to reports, Barclays Plc and JP Morgan Chase & Co are among the banks that are in discussion with Adani to provide funds to Adani Airport Holdings Ltd.

A sector expert said investors could adopt a wait-and-watch attitude before infusing capital in the aviation sector due to the ongoing uncertainties.

Also Read: Maharashtra Cabinet approves Mumbai Airport ownership transfer to Adani Holdings

MIAL has a debt of about INR 9,000 crores, including a project term loan of about INR 5,470 crores. In March, MIAL’s board approved a plan to raise 10-year rupee or foreign currency-denominated bonds worth $1.5 billion to refinance the existing debt. The bonds could be listed at London, Singapore or other global stock exchanges according to the plan.

The airport is also considering availing of a bridge loan which could be repaid through the proceeds of the bond. The board also appr­oved an increase in the existing borrowing limit of the company from INR 16,500 crore to INR 25,000 crore to facilitate the capital raise.

Airports in India have been hit by the two waves of the COVID-19 pandemic. The sharp drop in traffic has impacted both aeronautical and non-aeronautical revenue streams. In March, rating agency ICRA said Indian airports could suffer a loss of INR 5,400 crore in FY21.

Also Read: Air travel likely to get costlier?

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