In what could be the first major move by a foreign bank after the short-selling fiasco faced by the Adani Group, London-based Barclays may be selling its edible oil exposure to the energy conglomerate’s ports.
The decision to sell the group’s exposure responds to concerns expressed by some of Barclays’ investors regarding the loan granted to the Adani group. “The group that is in the news has no good reasons, especially after the Hindenburg report and some of the big investors have raised concerns about the bank’s exposure to the Indian conglomerate. This may have prompted the bank to reduce its exposure,” a senior banker said on condition of anonymity. When contacted by email, the bank declined to comment on the development.
Nearly nine large foreign banks are said to have lent the Adani group close to $5.25 billion or nearly half the value of the ACC-Ambuja cements acquisition. The deal was the most expensive M&A transaction of 2022. Banks have lent to the group as a mix of short-term loans, medium-term loans and long-term loans. While the exact exposure could not be determined, Barclays is said to have lent around $750 million, most of it for 12 to 18 months. Standard Chartered is the leading banker, while Japan’s MUFG, Citibank and JP Morgan also have considerable exposure to foreign bank-financed acquisition.
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