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Moody's revises rating for Adani firms from 'stable' to 'negative' as investors halt deals
A man walks past a corporate office of Adani Group in Gurugram, India, November 22, 2024.
Ratings agency Moody's said on Tuesday that it had cut the outlook on the ratings of seven Adani entities to 'negative' from 'stable,' citing the US indictment of Chairman Gautam Adani and others on alleged bribery charges, which could likely weaken the group's access to funding and increase its capital costs.
Moody's also affirmed the ratings on all seven entities, which include Adani Ports and Special Economic Zone Limited, and two limited restricted groups of Adani Green Energy.
Some nations and investors have either scrapped deals or halted investments in Adani Group after the US indicted the billionaire for alleged bribery and fraud to win contracts for a group company, Adani Green Energy.
Adani Group has denied all the accusations as "baseless", but its 10 listed entities have lost about $33 billion in market value since the indictment, with Adani Green the hardest hit, losing about $9.7 billion in market value.
Halted deals
Here's a list deals that have either stalled or been cancelled since the news broke:
Kenya has canceled a procurement process of more than $2 billion that was expected to give control of its main airport to the Adani Group. The deal was to add a second runway at the Jomo Kenyatta international airport and upgrade the passenger terminal in exchange for a 30-year lease.
Kenya also scrapped a separate 30-year, $736-million public-private partnership, signed by Adani Energy Solutions with its energy ministry in October.
French oil major TotalEnergies TTEF.PAwill not make any more investments in the Adani Group. Total has a 20 percent stake in Adani Green Energy, putting its financial exposure in Adani firms at between $4 billion and $5 billion, Bernstein Research estimates. Shares of Adani Green Energy plunged more than 11 percent after TotalEnergies' statement, while those of Adani Total Gas, in which Total holds 37.4 percent , closed down 1.4 percent .
The US International Development Finance Corp is reviewing the impact of the indictment against Gautam Adani on the agency's plan to lend $550 million for a port development project in Sri Lanka partly owned by Adani Group.
Sri Lanka is studying the accusations against Adani Group and will consider all aspects of its projects in the island nation. The government is taking the concerns seriously but has made no final decision yet.
Bangladesh has set up a committee to investigate its power generation contracts signed during the tenure of former prime minister Sheikh Hasina, one of them with Adani Power. The committee has urged the interim government to hire a global legal firm to ensure thorough and transparent vetting of the deals.
India's southern state of Andhra Pradesh state is weighing the possibility of canceling a power supply contract linked to the Adani Group, a top official told Reuters, after the US bribery indictments.
