Fitch Ratings Views Adani Ports' Acquisition of NQXT as a Positive Move for Global Diversification
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Synopsis
Fitch Ratings has indicated that Adani Ports' acquisition of the North Queensland Export Terminal is credit neutral but strategically beneficial, supporting its international diversification goals. The deal, involving new equity shares for existing shareholders, is projected to enhance APSEZ's global EBITDA significantly.
Key Takeaways
- Fitch Ratings views the acquisition as credit neutral.
- Supports APSEZ's international diversification efforts.
- Projected increase in global EBITDA contribution from 4% to 10%.
- Minimal operational impact since APSEZ already operates NQXT.
- Negligible refinancing risk with no debt maturities until 2030.
New Delhi, April 25 (NationPress) Fitch Ratings has described the acquisition of the North Queensland Export Terminal by Adani Ports and Special Economic Zone Limited (APSEZ) as credit neutral, while also emphasizing its positive strategic implications.
The global ratings agency views this acquisition as a supportive move for APSEZ’s efforts toward international diversification, which is a crucial long-term objective for the company.
Announced on April 17, 2025, the acquisition includes APSEZ issuing new equity shares to the existing shareholders of North Queensland Export Terminal (NQXT), who are affiliated with the same promoter group as APSEZ. The deal awaits regulatory and shareholder approval.
Fitch anticipates that the financial stability of APSEZ will remain stable post-acquisition, predicting that gross leverage will hover around 3x from FY26 to FY29. This transaction is expected to enhance the company's global EBITDA contribution from 4% to 10%, indicative of a significant advancement in its global expansion strategy.
Moreover, the acquisition marginally increases the percentage of coal within APSEZ's cargo mix, but this is projected to decrease over time as containerized and other non-coal segments experience stronger growth.
From an operational perspective, the effect on NQXT is expected to be minimal since APSEZ already manages the terminal. With an annual coal throughput of 35 million tonnes and a current utilization rate of 70%, minimal capital expenditure will be needed in the medium term. Additionally, long-term take-or-pay contracts and an 85-year remaining lease life provide robust cash flow visibility for APSEZ.
This acquisition also presents negligible refinancing risk, as NQXT has no debt maturities until 2030. Its existing debt framework features conservative elements, including restrictions on further borrowing and controlled cash outflows, ensuring financial prudence.
The significance of Fitch's perspective lies in the agency's global impact on investor sentiment, particularly in emerging markets. As a prominent credit rating agency, Fitch’s evaluations are closely monitored by global investors, financial institutions, and policymakers. A credit-neutral yet strategically beneficial perspective from Fitch suggests that the acquisition is a well-calculated decision that fortifies APSEZ’s long-term business profile without endangering its financial integrity.
Although the acquisition may not have an immediate effect on APSEZ’s credit rating, Fitch's analysis validates the strategic reasoning behind the move, strengthening investor confidence in the company's aspirations for global growth.
The North Queensland Export Terminal (NQXT) is situated in the Port of Abbot Point, approximately 25 kilometers north of Bowen, Queensland, Australia. It is recognized as the most northerly deepwater coal export terminal in the country.
