The Aditya Group Bonds are an exciting opportunity that were recently organised by Mr. David Simpson, the newly appointed managing director.
1 – Utilizing the profits of the group’s other companies, mainly the construction arm, although in recent years this has been lessened as the company has been commissioned more within the group itself.
2 – Mortgaging of the company’s real estate assets.
Upon taking over the running of the group, the new generation of director’s first resolution was to perform a financial debt restructure.
This process is a savvy move that will provide an instant boost to the group’s balance sheet, allowing cash to enhance and improve the schools etc.
However, it’s one that has proven to present a challenge. The current fee structures in place allow the group to afford to operate, but there is no substantial excess to begin paying off the current loans in order to complete the financial restructuring.
Loyal to the customs that were set in place by the late Mr. Bhaskar Aditya, Aditya Group schools refuse to accept any type of donation and the group will only consider raising the education fees as a last resort.
Aditya Group endeavor to charge as lower price as possible for their student’s education, yet with no compromise to the quality of the education and facilities.
In fact, research shows that the facilities offered are by far superior to most other schools, and yet the prices are far lower than competitors.
Previously borrowing against real estate assets to further develop the schools and the group currently has a total debt of approximately $20m USD with various banks.
The interest on this $20m USD averages at 14.8% so translates to nearly $3m USD per year. Add to this the principal repayments and Aditya Group has an annual debt liability in excess of $4m USD per annum.
In India, it’s almost impossible to borrow money at less than 10% interest per annum. Aditya Group is a very wealthy company with total a value of over $150m USD (recent asset valuations over $100m – 2018 CBRE), and operational companies valued over $40m (official valuation of educational society only of $24m – 2018 KPMG). Even with its debt exposure verses value being only 15%, still the average rates being offered to the group are closer to 15%.
It was in search of alternative funding options that led Mr. Anirban Aditya (Chairman) and Mr. Avishek Mazumdar (Chief Strategist) to be introduced to Mr. David Simpson, who owned a group of businesses that also included investment funding, with a proven track record in raising funds for various projects around South East Asia.
Over a series of meetings, a good relationship formed, resulting with Mr. Simpson getting heavily involved in the group and thus has led onto the offering the Aditya Group bonds. The bonds are simply a vehicle which enables the group to raise money against its properties at a lower, more attractive rate of interest than the banks currently offer. A further attraction is that this also allows numerous individuals from all over the world to invest in the group’s philosophy and also benefit from earning more attractive investment returns than those offered to them, also by the banks!
The bonds therefore present a win for the group and their 1000’s of students, and also for their investors.
The money raised from the bond offering will first be used to refinance the existing mortgages, thus providing an instant and significant increase in both profits and cash-flow, which will then ultimately enable the group to fulfill their plans and continue to give back to more students.
The bonds were set up by Tectona Advisory Ptd., Ltd in Singapore. Interested investors can find further information via one of their product promotors.
Recommended: Emerging Trends Advisors Co., Ltd ( Aditya Group Bond )