TotalEnergies could reduce its stake in Adani Green to take advantage of the rise in valuation

0

TotalEnergies SE said it may sell a small portion of its 20% stake in Adani Green Energy Ltd. to take advantage of the rising valuation of the Indian renewable energy producer.

The French energy giant bought 20% of Adani Green in 2021 for $2 billion, building on a series of earlier deals with Indian billionaire Gautam Adani. That stake was worth about $10 billion at the end of August, according to TotalEnergies.

Patrick Pouyanne, the chief executive of TotalEnergies, said in response to a question during an investor presentation on Wednesday that appreciation in value is “a source of potential cash.” In an interview in New York, Pouyanne said his company was not currently considering reducing its stake, and if it did, any reduction would be small and only recover part of its initial investment.

“We are committed to Adani Green,” he said in the interview.

Shares of Adani Green are up 54% this year, against a 1.8% drop in India’s benchmark S&P BSE Sensex index. Still, Adani Green is down 15% so far this month amid fears it will take on too much debt as it expands. The company’s balance sheet is “safe”, Pouyanne said.

Gautam Adani, Asia’s richest man, has pledged to invest around $70 billion across the green energy supply chain by 2030. His conglomerate aims to become the largest renewable energy producer in the world by the end of this decade.

In June, TotalEnergies agreed to buy a 25% stake in Adani New Industries Ltd. for an undisclosed sum, as part of a plan to invest billions of dollars in the development of green hydrogen in India. Adani New Industries is owned by Adani Enterprises, the flagship firm of the coal-ports conglomerate controlled by the Indian tycoon.

Share.

About Author

Comments are closed.