Adani Ports shares in focus as co withdraws $553 million US loan for Sri Lanka terminal

Adani Ports and Special Economic Zone (APSEZ) shares will remain in focus after the company withdrew its request for a $553 million loan from the U.S. Development Finance Corporation (DFC) for the Colombo West International Terminal (CWIT) project in Sri Lanka and decided to fund the project through its internal accruals, the company
informed the exchanges.

“We have withdrawn our request for financing from the DFC,” APSEZ informed the bourses late night on Tuesday.

The CWIT project in Sri Lanka is making "good progress" and is expected to be commissioned by early next year. Its funding will come from the company's internal accruals and capital management strategy, APSEZ said.

ET had reported that the U.S. Development Finance Corporation (DFC), which had approved a loan of $553 million for Colombo West International Terminal Pvt. Ltd. (CWIT), had not disbursed the loan.

In 2023, the U.S. Development Finance Corporation (DFC) approved a loan to support the development, construction, and operation of a deepwater container terminal at the Port of Colombo in Sri Lanka. The financing was allocated to Colombo West International Terminal (CWIT), a consortium comprising Sri Lankan conglomerate John Keells Holdings, the Sri Lanka Ports Authority (SLPA), and Adani Ports & Special Economic Zones Limited (APSEZ).

Adani had stated at the time that the Port of Colombo was the largest and busiest transshipment port in the Indian Ocean. Operating at more than 90% utilization since 2021, it highlighted the urgent need for additional capacity. “The new terminal will serve the growing economies in the Bay of Bengal, leveraging Sri Lanka’s strategic position on major shipping routes and its proximity to these expanding markets,” the company had added.

Although the transaction was approved in 2023, no funds had been disbursed, and the situation was under review, a DFC spokesperson stated in response to a query from The Economic Times.

Also Read: DLF Camellias' Rs 190 crore Gurugram apartment: How many Bitcoins would you need?

“The project has not reached financial close or signed a loan agreement. We continue to conduct due diligence to ensure that all aspects of the project meet our rigorous standards before any loan disbursements are made,” a fortnight ago, DFC said in response to an email query.

This comes after weeks of investigations by the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC), along with the enforcement of laws related to the allegations concerning Adani. “DFC was aware of the recent allegations related to Adani and was actively assessing the ramifications in light of the DOJ announcement. We deferred to these agencies for any law enforcement matters and related issues,” the organization stated. It also emphasized its commitment to ensuring that its projects and partners adhered to the highest standards of integrity and compliance.

The spokesperson stated that the DFC was "actively assessing the implications in light of the recent Department of Justice (DOJ) announcement" regarding allegations against Adani.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)