Andhra Pradesh likely to suspend power deal with Adani: report

Andhra Pradesh could suspend the power purchase deal linked to the Adani Group citing the US indictment against the group’s founder Gautam Adani in a bribery case, government sources told Reuters.

The sources also added that the southern state would ask the central government and the Solar Energy Corporation of India to investigate the allegations made by the US authorities in return for Gautam Adani and other group executives are alleged to have paid $265 million in bribes to government officials to win solar energy contracts.

There is also an opportunity for Andhra Pradesh cancel the energy supply project as the state is “digging into all internal files” of the previous government under which the alleged misconduct took place, State Finance Minister Payyavula Keshav had told Reuters on Monday.

Here are some previous actions by government agencies and companies in the aftermath of the bribery case:

Kenya

Kenyan President William Ruto announced this cancellation of two major projects involving the Indian Adani Group. The first was the tender process to expand Kenya’s main airport, while the second was a $700 million energy deal for the construction of electricity transmission lines, previously signed by the Ministry of Energy with a subsidiary of the Adani Group.

Total Energies

Total Energies said that it would make no new financial contributions amid a US federal indictment against the Adani family. “Until the allegations against the individuals of the Adani Group and their consequences are resolved, TotalEnergies will not make any new financial contribution as part of its investments in the Adani Group,” the French energy company said.

Market reactions after the bribery scandal

Shares of all Adani Group companies ended 25% lower on Thursday lost ₹2.3 lakh crore in market capitalization after the Group was involved in the infamous bribery scheme. The group has seen its valuation fall by nearly ₹3 lakh crore in just four sessions through Tuesday. The sudden drop in valuation has also lowered the conglomerate’s ranking in terms of market capitalization by two notches to six.

S&P, Moody’s and Fitch rating action against Adani

S&P

Rating agency S&P downgraded its outlook for Adani Ports, Adani Electricity and a unit of Adani Green Energy following the US indictment of Gautam Adani and other group executives. S&P wrote in its note that the negative outlook and the recent course of events could limit access to financing for the group companies.

Moodys

Credit rating agency Moody’s has downgraded the outlook for seven Adani Group companies following the indictment of Adani Group Chairman Gautam Adani and several other group leaders by the US SEC and a district court.

Fitch

Fitch Ratings took rating actions on Adani shares following the bribery allegations and the indictment of certain Adani Green Energy board members by the US SEC and the District Court. The rating agency has put Adani Ports’ long-term foreign currency rating and its US dollar senior unsecured bonds on ‘negative watch’.

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