Adani Airport Wants to Refinance Its $750 Million Debt to Apollo Global: Here’s Why

Adani Group's airport management arm is looking to refinance its debt and raise more money, and Wall Street giants are flocking to its doorstep to lend a hand.

Adani Airport Holdings Ltd, which manages seven top-tier airports in India, has been in talks with private equity giant BlackRock and hedge fund Citadel to refinance about $750 million in debt and raise additional funds, reported The Economic Times.

The $750 million is in the form of senior secured private placement notes the company raised in 2022 for its subsidiary, Mumbai International Airport Ltd (MIAL), which owns Chhatrapati Shivaji Maharaj International Airport (CSMIA) in Mumbai, the second-largest airport in India. It was given by Apollo Global Management.

These notes have a seven-year term, with maturity scheduled for 2029. However, the ET report says that the interest rates or other costs associated with the debt are set to become more expensive after April-May 2025. This means the cost of borrowing for MIAL will increase, even though the loan won't be fully paid off until 2029.

Because of this potential increase in borrowing costs after 2025, there have been reported negotiations to refinance part of the $750 million debt. Citadel told ET that the report is "incorrect."

The conglomerate is looking to raise another $750 million for Adani Airport Holdings to fund upgrades and expansion of several of its airports. This would include $300 million in fresh debt, with the rest being refinancing, the report said.

Why Wall Street Giants Might Be Interested

In addition to Mumbai, Adani Airport Holdings also operates airports in Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati, and Thiruvananthapuram. Furthermore, the company will also manage the upcoming airport in Navi Mumbai. Collectively, these airports serve about 23% of India's air traffic.

According to Crisil Ratings' August report, Adani Airport has debt servicing of about Rs 400 crore each in FY25 and FY26, which is expected to be met through cash flow of about Rs 1,600 crore and Rs 2,900 crore, respectively. The company also has a capex plan of about Rs 14,500 crore in FY25 and FY26. The report also noted that bullet payments of ECB (External Commercial Borrowing) of $400 million due in FY26 are expected to be refinanced in time.

"Adani Group is expected to support AAHL in case of any funding requirements for capex or debt servicing," the report noted.

In the third quarter of the 2024-2025 fiscal year, Adani Airports reported a 97% drop in net profit but a rise in passenger and cargo traffic. Adani Airports handled 24.6 million passengers, which was an 8% increase. Its total income rose 33% to Rs 2,939 crore in Q3 FY25.