Adani Ports and Special Economic Zone (APSEZ) signed a 30-year concession agreement with the Tanzania Ports Authority to operate and manage Container Terminal 2 at the Dar es Salaam Port in Tanzania. File
| Photo Credit: ANI

Adani Ports and Special Economic Zone (APSEZ) on Friday said its wholly owned subsidiary Adani International Ports Holdings Pte Ltd (AIPH) has signed a 30-year concession agreement with the Tanzania Ports Authority to operate and manage Container Terminal 2 at the Dar es Salaam Port in Tanzania.

The Dar es Salaam Port is a gateway port with a well-connected network of roadways and railways, APSEZ said in a statement.

East Africa Gateway Ltd (EAGL) has been incorporated as a joint venture of AIPH, AD Ports Group, and East Harbour Terminals Ltd (EHTL), the statement added.

APSEZ will be the controlling shareholder and will consolidate EAGL on its books, it said.

According to the statement, Container Terminal 2, with four berths, has an annual cargo handling capacity of 1 million twenty-foot equivalent units (TEUs) and managed 0.82 million TEUs of containers in 2023 — about 83% of Tanzania’s total container volumes.

In a stock exchange filing, APSEZ said it will buy back $195 million of bonds due in 2024 using its cash reserves. File photo of Adani Group Chairman Gautam Adani.
| Photo Credit: PTI

Adani Ports and Special Economic Zone will prepay $195 million of debt due in 2024 as the conglomerate helmed by Gautam Adani looks to boost investors’ confidence post being targeted by a US short-seller.

In a stock exchange filing, APSEZ said it will buy back $195 million of bonds due in 2024 using its cash reserves.

Out of the $520 million principal outstanding, $325 million will be left after the buyback, it said.

The company board “has approved tranche II of the tender offer to purchase for cash up to $195 million in aggregate principal amount of the outstanding 3.375 per cent senior notes due 2024 which represents 30 per cent of the principal amount of the notes,” it said.

In May, the company had bought back its July 2024 bonds for cash $130 million in aggregate of the principal amount and stated that it would buy back 20% of the principal amount of the bonds in each of the next four quarters.

In the second tranche of this, the company is now proposing to purchase up to $195 million of bonds. This represents 30% of the principal amount of the bonds ($650 million). After $130 million buyback in May, $520 million remained outstanding.

The buyback tender is open till October 26, the filing said.

Adani Group has been attempting to rebuild investors’ confidence since Hindenburg Research in a January 24 report accused it of accounting fraud and improper use of offshore tax havens for stock manipulation.

The group has denied all allegations.

The company has engaged Barclays Bank, DBS Bank, Emirates NBD Bank PJSC, First Abu Dhabi Bank PJSC, Mizuho Securities (Singapore) Pte Ltd, MUFG Securities Asia Singapore Branch, SMBC Nikko Securities (Hong Kong) and Standard Chartered Bank to serve as deal managers for the offer.

The company will pay accrued interest, in respect of any notes purchased in the tender offer.

The Deloitte company logo.
| Photo Credit: Reuters

Deloitte has resigned as auditor of the Adani Group’s port company, with the firm run by billionaire Gautam Adani saying the auditor wanted a wider remit over other firms in the conglomerate following the report of a U.S.-based short seller. The resignation comes weeks after Deloitte raised concern over certain transactions flagged in the report on the Adani Group by Hindenburg Research.

In a statement, Adani Ports and Special Economic Zone (APSEZ) confirmed Deloitte’s resignation, and the appointment of MSKA & Associates as the company’s new auditor.

Deloitte has been the auditor of APSEZ since 2017. In July 2022, it was given another five-year term.

“In Deloitte’s recent meeting with APSEZ management and its Audit Committee, Deloitte indicated a lack of a wider audit role as auditors of other listed Adani portfolio companies. The Audit Committee was of the view that the grounds advanced by Deloitte for resignation as Statutory Auditor were not convincing or sufficient to warrant such a move,” APSEZ said.

APSEZ conveyed that it was not within the remit of the firm and its Board to recommend group-wide appointments as other listed Adani portfolio companies are completely independent, with separate boards, executive teams, and minority shareholders.

“Following this, Deloitte was not willing to continue as APSEZ’s statutory auditor and, therefore, it was agreed to amicably end the client-auditor contractual relationship between APSEZ and Deloitte,” the company said.

Also read | Deloitte flags Adani Port transactions

Deloitte Haskins & Sells LLP in May flagged three transactions, including recoveries from a contractor identified in the Hindenburg report, in issuing a qualified opinion on the accounts of APSEZ.

In the auditors’ report on the audit of the fourth quarter and 2022-23 financials, Deloitte highlighted transactions with three entities, which the company said were unrelated parties.

Deloitte, however, said it could not attest to the company’s statement as no independent external examination had been done to prove the claims.

Following this, it wanted a wider conglomerate-wide audit, which the Adani Group firm refused.

Hindenburg Research in its January 24 report that levelled allegations of fraud, stock manipulation, and money laundering against the Adani Group, had also flagged inadequate disclosures of related party transactions. The Adani Group has denied all allegations.

Deloitte had stated that the Adani Group did not consider it necessary to have an independent external examination of these allegations because of their evaluation and the ongoing investigation by the Securities and Exchange Board of India (SEBI).

“The evaluation performed by the Group does not constitute sufficient appropriate audit evidence for the purposes of our audit,” Deloitte had said in notes to APSEZ’s financial statement.

In the absence of the independent external examination and the pending completion of investigation by SEBI, the auditor had said it cannot comment if the company was fully compliant with the law and if the transactions flagged may result in possible adjustments and/or disclosures in the financial statement in respect of related parties.

The six-member expert panel appointed by the Supreme Court in May found no regulatory failure or signs of price manipulation in the Adani Group stocks in its interim report.

The transactions flagged by Deloitte included engineering, procurement and construction purchase contracts with a subsidiary of a party identified in the Hindenburg report.

Also, the group “re-negotiated the terms of sale of its container terminal under construction in Myanmar” to Anguilla-incorporated Solar Energy Limited. The sale consideration was revised from ₹2,015 crore to ₹246.51 crore, and an impairment charge was taken. The group told the auditor these are not related parties.

“In response to a query by the Audit Committee, Deloitte confirmed that they have received all the APSEZ information from the management of the company,” APSEZ said in a statement on Saturday.

“The same has been confirmed by Deloitte in their resignation letter dated August 12, 2023, to the company,” it added.

“The ‘other matters’ highlighted in the auditor’s resignation are adequately disclosed and addressed in our FY23 financial statements. We are fully confident that these matters will be appropriately resolved in our September ’23 filing,” APSEZ said, without disclosing the contents of the resignation letter.