• Mon. Dec 23rd, 2024

    Adani has a return strategy following the $132 billion Hindenburg disaster

    Adani has engaged top-tier crisis communication and legal teams in the United States, cancelled a $850 million coal plant acquisition, cut spending, returned some debt, and plans to refund more. Aps’s turnaround plan after $132 billion The Hindenburg route.

    Almost a month after a bombshell short seller report slashed Gautam Adani’s empire’s market value by $132 billion, the Indian billionaire has hired top-tier US crisis communication and legal teams, cancelled a $850 million coal plant purchase, cut expenses, repaid some debt, and promises to repay more.

    The ports-to-power conglomerate led by Adani — once Asia’s richest person — is attempting to reclaim the narrative and reassure nervous investors and lenders after US-based Hindenburg Research accused it of accounting fraud, stock manipulation, and other corporate governance issues on Jan. 24. These charges are denied by the Adani Group.

    Since then, Adani and his associates have begun repairing the damage. Apart from a drive to present themselves as responsible borrowers with prepayments and on-time loan payments. Officials have also begun a series of meetings to appease international bondholders. They have tapped by the billionaire for more than $8 billion in finance in recent years.

    Bloomberg News reported Feb. 11 that the group has hired Kekst CNC as a worldwide communications advisor, reflecting the firm’s recognition of the seriousness of the damage to its reputation. The public relations agency, which has offices in both New York and Munich, is well-known for its work with other business meltdowns in recent years, such as WeWork Inc.’s value implosion in 2019.

    According to a source familiar with the case, Kekst’s job is to assist the group rebuild investor trust by setting out the right context, not just on the Hindenburg charges, but also on other worries that have lingered regarding the basic health of the firm.

    Adani-maps-comeback-strategy-agter-$132-billion-Hindenburg-rout
    Adani maps comeback strategy agter $132 billion Hindenburg rout

    Kekst is working with Adani’s C-suite and communications team and may subject them to a “situation room.” The firm’s term for a simulated crisis in which executives are bombard with tweets, calls from journalists, and other stressful developments. According to the person, who asked not to identified because they not authorised to speak publicly.

    According to the Financial Times, which cited anonymous sources, the Adani Group has also hired the American legal firm Wachtell, Lipton, Rosen & Katz to fight back against the short seller’s accusations. Wachtell is one of the most expensive legal firms in the United States. It has expertise defending clients who have targeted by shareholder activists.

    The moves show that “Adani, even after the stock market bloodbath. They can still afford good lawyers,” said Bhaskar Chakravorti, the dean of global business at Tufts University’s Fletcher School. “As a global investor, I would still have lingering questions.”

    His comments reflect how the saga has grown beyond the group to cast a shadow on India’s ability to rival China as an investment destination. Sparking speculation from billionaire investor George Soros that it might even spur a “democratic revival” in the country. Adani perceived to close to Prime Minister Narendra Modi, who has not directly addressed the issue. But has lashed out at opposition parties who have called into question his relationship with the billionaire. By highlighting their own past corruption scandals.

    Apart from the narrative, investors are looking at two things: the group’s high leverage ratios. Its capacity to produce cashflow after losing $2.5 billion in new money from the withdrew share offering.

    Adani management has begun to address these issues. They told investors on Thursday that the objective is to reduce the group’s net debt to Ebitda ratio. To less than three times next year, down from 3.2 times now, Bloomberg reported, citing individuals familiar with the situation.

    Adani Power Ltd. has also cancelled a proposal to buy DB Power Ltd.’s coal plant project in central India. As part of the group’s general attempt to reduce capital spending and preserve cash.

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