Embattled billionaire Gautam Adani is in talks with creditors to pre-pay some loans backed by pledged shares, as he seeks to restore confidence in his conglomerate’s financial health, people with knowledge of the matter said.

The move would see lenders release some of the stock in Adani Group companies that was pledged as collateral, and repayment could take place as early as this weekend, the people said, asking not to be identified as the details are private. 

The conglomerate has pledged 5.5% of its listed units’ shares overall in loans, they said. 

While there’s been no suggestion that Adani Group entities would struggle to make dollar debt payments due soon, and the group has flagged interest coverage ratios that show it has the ability to meet such obligations, the move is an attempt to restore confidence, after some banks stopped accepting the conglomerate’s securities as collateral in client trades. 

The Indian group hasn’t faced margin calls on these pledges, and is seeking the prepayment proactively, one of the people said.

An Adani Group representative didn’t immediately reply to an email seeking comment.

Adani Ports and Special Economic Zone Ltd made payments on dollar bonds as scheduled on Thursday (Feb 2), a modicum of solace for investors shaken by the turmoil. All 15 dollar debt securities of the group also advanced on Friday. 

Still, there remains considerable uncertainty over the group’s cash flow and fiscal positions after it withdrew a US$2.4 billion share sale this week meant to inject liquidity and bring down leverage. 

The key priority for the prepayment is to remove any concern about margin calls, the people said, adding that Adani officials will speak with investors in the coming days, and will make all payments on time. 

The tycoon’s businesses have lost US$108 billion of market value in a week, one of the biggest wipeouts in India’s history, after an explosive report by short-seller Hindenburg Research forced him to pull the stock sale at the 11th hour.

Some market participants now see opportunities in the sell-off. Goldman Sachs Group Inc and JPMorgan Chase & Co have told some clients that bonds related to Adani can offer value due to the strength of certain assets.

Adani, who last year became the world’s second-richest man, has dropped out from the world’s 10 richest list since Hindenburg accused his companies of fraud to inflate revenue and stock prices. 

  - Bloomberg