Bloomberg | | Posted by Singh Rahul Sunilkumar
The outlooks on Adani Group’s credit scores were slashed to negative by S&P Global Ratings as investors grow concerned about potential governance risks and funding challenges.
S&P lowered the rating outlook for Adani Ports & Special Economic Zone Ltd. and Adani Electricity Mumbai Ltd. to negative from stable on Friday, analysts Mary Anne Low and Cheng Jia Ong said in a statement. The move follows a short-seller report alleging widespread problems at the entities, which triggered losses across their stocks and bonds despite Adani Group’s rebuttals.
“There is a risk that investor concerns about the group’s governance and disclosures are larger than we have currently factored into our ratings,” they wrote. “Or that new investigations and negative market sentiment may lead to increased cost of capital and reduce funding access for rated entities.”
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Earlier, Moody’s Investors Service cited similar concerns about Adani’s ability to raise capital or refinance maturing debt in coming years. Fitch Ratings said it expects no material changes to Adani Group’s forecast cash flow and noted that there aren’t significant offshore bond maturities in the near term.
All three major credit assessors left their ratings on Adani’s companies unchanged. S&P said the business fundamentals remain intact, short-term liquidity is adequate and debt maturities in the next 12 months are manageable.
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Adani Group dollar bonds rallied on Friday as billionaire Gautam Adani was said to be in talks with creditors to prepay some loans in a bid to restore confidence in his business empire.