Gautam Adani indictment impact: Adani Green Energy Ltd. has called off its $600 million bond offering, which was priced at approximately 7.45-7.5%. This decision follows a U.S. Department of Justice and SEC announcement related to a court order that indicted senior Adani Group executives, including Gautam Adani and Sagar Adani, for allegedly offering $250 million in bribes to government officials for contract procurement.
The bond initiative aimed to align liabilities with the 25-year power purchase agreements (PPAs) of Adani’s renewable energy assets. The funds were intended to release capital from an existing $3.4 billion revolving credit facility, facilitating new project funding.
This marks the second cancellation of an Adani Green bond issuance. In the previous month, the company abandoned a similar offering, citing unfavorable rates ahead of the US election.
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Below is the full text of Adani Green’s filing to the exchange on the withdrawal of the bond issue:
The United States Department of Justice and the United States Securities and Exchange Commission have issued a criminal indictment and brought a civil complaint, respectively, in the United States District Court for the Eastern District of New York, against our Board members, Gautam Adani and Sagar Adani. The United States Department of Justice have also included our Board member, Vneet Jaain, in such criminal indictment.
In light of these developments, our subsidiaries have presently decided not to proceed with the proposed USD denominated bond offerings.
The withdrawal comes amidst increasing legal and regulatory scrutiny, potentially affecting the group’s future ability to access international capital markets.
In the previous month, Adani Green Energy had withdrawn its $1.2 billion bond issue when investors sought higher yields than the company’s acceptable range. Prior to that cancellation, the company had secured a $1.6 billion order book from investors across Hong Kong, Switzerland, and the U.S.
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The previous month’s bonds were initially offered with a fixed coupon rate of 7% over 20 years.
In February 2023, Adani Enterprises withdrew a follow-on public offering following a Hindenburg Research report that led to a Rs 9 lakh crore reduction in market capitalisation across the group. whilst share prices have recovered, bond market uncertainties continue, further complicated by geopolitical tensions.