TotalEnergies has put its multi-dollar plan to go into business with the Adani group on hold. The French company said it was awaiting clarity on the situation amid turmoil sparked by allegations of fraud against the Indian conglomerate.
“It (the partnership deal) was announced, nothing was signed. It doesn’t exist,” TotalEnergies chief executive Patrick Pouyanne said yesterday (Feb. 8), referring to his firm’s plan with Adani’s new hydrogen venture. “Mr Adani has other things to deal with now, it’s just good sense to pause things while the audit goes forward.”
TotalEnergies was supposed to invest initially $5 billion in Adani’s gas distribution and solar projects.
Pouyanne also said his firm was waiting for the result of an audit launched by Adani into allegations of financial irregularities by Hindenburg Research. The statement comes days after TotalEnergies was forced to share its exposure to the Adani group.
The partnership deal between the two companies was announced in June 2022, according to which TotalEnergies was supposed to have a “25% interest in Adani New Industries Limited (ANIL).”
“ANIL will be the exclusive platform of Adani Enterprises and TotalEnergies for the production and commercialization of green hydrogen in India,” TotalEnergies said in a press release dated June 14, 2022.
ANIL had last year shared its plans to invest over $50 billion over the next 10 years in green hydrogen and associated ecosystems.
“In the initial phase, ANIL will develop a green hydrogen production capacity of 1 million tonnes per annum before 2030,” the Adani group had said.
The Adani group is on a defensive foot after US-based Hinderburg accused it of stock manipulation and accounting fraud in January. Since then the group’s listed entities have been on a losing spree, suffering an erosion of more than $100 billion in market capitalization.
The group’s stocks witnessed a slight recovery this week in anticipation of its quarterly earnings. However, they were back in the red today after index provider MSCI said it would conduct a free-float review of Adani’s securities.
The group is reportedly planning to prepay $500 million of loan due next month after some banks baulked at refinancing its debt, Bloomberg reported.