Adani Green will not proceed with dollar-denominated bond offerings

Adani Green Energy, the renewable energy arm of Gautam Adani-led Adani Group, on Thursday said its subsidiaries have decided not to proceed with the proposed dollar-denominated bond offerings.

“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 green energy company says in a regulatory filing.

Shares of Adani Green Energy fell as much as 20% in intraday trade on Thursday after U.S. Securities and Exchange Commission (SEC) charged Gautam Adani and his nephew Sagar Adani for an alleged bribery plot that involved paying or promising to pay the equivalent of hundreds of millions of dollars in bribes to Indian government officials to secure their commitment to purchase energy at above-market rates that would benefit Adani Green and Azure Power. The renewable energy stock opened at ₹1,150 on the BSE before hitting a low of ₹1,136, down 19.5% compared with its previous closing price of ₹1,411.75.

Meanwhile, Moody’s Ratings said the indictment of Adani Group's chairman and other senior officials on bribery charges is credit negative for the group’s companies. “Our main focus when assessing Adani Group is on the ability of the group’s companies to access capital to meet their liquidity requirements and on its governance practices,” the credit rating agency says.

As per the indictment, Gautam Adani, his nephew Sagar Adani and Vneet S. Jaain, managing director and CEO of Adani Green Energy, allegedly conspired to misrepresent corruption practices and conceal the bribery scheme from U.S. investors and international financial institutions in order to obtain financing, including to fund those solar energy supply contracts procured through bribery.

“Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain caused the Indian Energy Company and certain of its subsidiaries to raise capital on the basis of false and misleading statements in connection with (i) two U.S. dollar-denominated syndicate loans totaling more than $2 billion from lender groups comprised of international financial institutions and U.S.-based investors; and (ii) two Rule 144A bond offerings for more than $1 billion underwritten by international financial institutions, which were marketed and sold to investors in the U.S., among other places,” United States Attorney for the Eastern District of New York says in a statement.