Adani Ports NQXT Acquisition is positive step towards global diversification: Fitch Ratings

The global rating agency has called the acquisition "credit neutral" but said it is a positive step for the company's long-term global expansion.

Fitch Ratings has characterized Adani Ports and Special Economic Zone Limited's (APSEZ, BBB-/Negative) acquisition of the North Queensland Export Terminal (NQXT) as credit neutral, while highlighting its positive strategic implications.

APSEZ announced the acquisition on April 17, 2025. The company will issue new equity shares to the current shareholders of NQXT as part of the deal. These shareholders also belong to the same promoter group as Adani Ports.

The deal is still awaiting approval from shareholders and regulators.

Fitch said the acquisition will not impact APSEZ's financial health. The agency expects the company's gross leverage to remain stable at around 3.0 times between financial years 2026 and 2029.

It also said that the acquisition will increase APSEZ's global earnings contribution significantly--from 4 per cent to 10 per cent.

Fitch said "The transaction is anticipated to increase the company's global EBITDA contribution from 4 per cent to 10 per cent, marking a significant step in its global expansion strategy".

Fitch also noted that this deal will slightly increase the share of coal in the company's cargo mix. However, this is expected to reduce over time, as container and other non-coal segments grow faster.

Operationally, the impact will be limited, as APSEZ already operates the NQXT terminal. The terminal handles 35 million tonnes of coal every year and currently runs at 70 per cent capacity.

It also requires very little capital spending in the near future. Long-term take-or-pay contracts and a remaining lease life of 85 years provide stable cash flows for Adani Ports.

Fitch added that there is minimal refinancing risk. NQXT has no major debt repayments until 2030. Its debt has conservative features like limits on more borrowing and controlled cash outflows, which help maintain financial discipline.

The agency views are closely followed by global investors, especially in emerging markets. While the rating agency did not change APSEZ's credit rating, it said the deal strengthens the company's global business profile. (ANI)