Adani Ports plans to buy back $195 million of its 2024 bond

Adani Ports, a flagship company of the Adani Group plans to buy back a portion of its 2024 bond in what the experts feel an attempt to blunt the allegations by US short-seller Hindenburg Research.

According to the media reports, Adani Ports and Special Economic Zone Ltd. will buy back $195 million worth of its 2024 bond.

The experts see the buy back as an attempt by the Indian conglomerate backed by billionaire Gautam Adani to move on from the allegations levied by a US short seller.

The 3.375% notes jumped the most since April on news the company would pay $975 for every $1,000 in principle for debt tendered by Oct. 11. Thereafter, the offer price drops to $965 per $1,000, it said in a statement on Wednesday.

The company said that it would fund the purchase from its cash reserves and said the bond in question has $520 million in principal outstanding.

The Adani group has been trying to rebuild investor confidence in recent months after a short seller Hindenburg Research report alleging malfeasance caused a selloff in its bonds and shares. Adani officials have repeatedly denied the allegations.

Having plunged as low as 85.8 cents on the dollar in February after Hindenburg published its allegations, the 2024 notes have recovered and were trading at 96.4 cents on the dollar on Wednesday, Bloomberg-compiled data show. The buyback offer constitutes a slight premium to the current price.

Bond buybacks allow companies to repurchase debt through tender offers to bondholders, enabling them to retire some or all of the securities ahead of their due date.

Adani’s announcement bucks the global trend. After interest rates rose sharply, companies have been repurchasing less debt. Keeping bonds with lower coupons for longer means they don’t have to take out more expensive new debt instead.