Fitch places some Adani bonds on negative watch after U.S. bribery charges

Representational image of the Adani Group logo
| Photo Credit: Reuters

Ratings agency Fitch has placed the ratings of six Adani group entities, including Adani Ports and Special Economic Zone Limited’s (APSEZ), Mumbai International Airport Limited’s (MIAL), Adani Energy Solutions (AESL), Adani Electricity Mumbai (AEML) and orth Queensland Export Terminal Pty Ltd’s (NQXT), on ‘Rating Watch Negative’.

The rating major has attributed its rating actions to the bribery charges and indictment of certain board members of Adani Green Energy Limited (AGEL) by the U.S. Securities and Exchange Commission and Department of Justice.

In addition to this, the rating major has affirmed its ‘BBB-‘ ratings on U.S. dollar secured bonds issued by Adani Green Energy Limited (AGEL), AESL and Adani International Container Terminal Pvt. Ltd. But the agency revised their outlook from Stable to Negative.

Fitch said it would monitor the U.S. investigation for any impact on Adani’s financial position, “particularly any material deterioration in near- to medium-term funding access, including their ability to roll over existing credit lines or access new facilities, as well as potentially higher credit spreads”.

TotalEnergies to halt financial contribution

French oil major TotalEnergies said on Monday (November 25, 2024) it would halt financial contributions to its Adani Group investments following last week’s indictment.

U.S. prosecutors have charged billionaire Gautam Adani, founder of the Adani Group, and seven others for their alleged roles in a $265 million scheme to bribe Indian officials to secure power-supply deals.

The Adani Group has said the accusations as well as those levelled by the U.S. Securities and Exchange Commission in a parallel civil case were “baseless and denied” and that it would “seek all possible legal recourse”.

Adani dollar bonds steadied on Tuesday and prices rose slightly after three days of heavy falls.

Prices on some of the more liquid Adani Ports and Special Economic Zone debts maturing between 2027 and 2041 were up between half a cent and 1.5 cents on the dollar. They have fallen about 8-12 cents since news of the indictment.

(With inputs from Reuters)