NEW DELHI: Adani Green Energy Ltd, the renewable energy arm of Gautam Adani’s conglomerate, has scrapped its $600 million bond sale following the bribery charges against its promoter in the United States.
The decision comes shortly after US prosecutors charged Adani and his associates in connection with an alleged scheme to pay over $250 million in bribes to Indian officials in exchange for favourable terms on solar power contracts.
The bond issue, which had been launched just hours before the bribery charges were made public, had been over-subscribed three times. However, in light of the serious legal developments, Adani Green decided to cancel the offering.
Criminal charges
The US Department of Justice and the Securities and Exchange Commission (SEC) filed criminal and civil charges, respectively, against Gautam Adani, his nephew Sagar Adani, and another board member, Vneet Jaain, in a US District Court in New York.
In a filing to the stock exchange, the company stated:
“In light of these developments, our subsidiaries have presently decided not to proceed with the proposed USD-denominated bond offerings.”
This is not the first time Adani Group has faced challenges related to its financial offerings. Just a month ago, Adani Green had attempted to sell a similar bond but had to postpone the deal after investor concerns over pricing.
Similar cancellation
The company’s woes were compounded last year when its flagship firm, Adani Enterprises, was forced to cancel a Rs20,000 crore Follow-on Public Offer (FPO) after allegations by the US short-seller Hindenburg Research triggered a major market selloff. Despite the issue being fully subscribed, the company chose to call it off and refunded the investors, further fueling investor skepticism.
The recent charges have put additional pressure on the group, which is already feeling the heat from both market volatility and ongoing investigations. The group’s ability to raise capital, which has been a key driver of its expansion, could face significant hurdles moving forward.
