French company TotalEnergies, a joint venture partner of Gautam Adani’s group, is preparing to sell up to 6 percent stake in Adani Green Energy (AGEL). This major company of the French energy sector currently holds about 19 percent stake in the renewable energy arm of Adani Group through two subsidiaries, 15.58 percent TotalEnergies Renewables Indian Ocean Limited and 3.41 percent TotalEnergies Solar Wind Indian Ocean Limited.
An industry executive familiar with the development said TotalEnergies had bought its stake in AGEL for about $2.5 billion in 2021, and it is now valued at about $8 billion. This means that Adani’s company has given a return of 220 percent to the French company in about 4 years. Because of which the French company is now thinking of earning some profit.
The person further said that this stake can be given to Adani Green Energy, which can evaluate the proposal. However, no official statement has come from Adani Green and Total. The current market cap of Adani Green is Rs 1.69 lakh crore. In such a situation, if Total Energy sells 6 percent of the company, then the company can get about Rs 10,200 crore (about 1.14 billion dollars).
debt reduction
This September, TotalEnergies Chief Executive Officer Patrick Pouyané told investors that AGEL remained a strong and growing company, but that the group would not expand its green energy partnership with Adani. He had said that I would be very happy to sell my stake in Adani Green. In January 2021, Total had acquired a 20 per cent minority stake in AGEL and 50 per cent ownership in its operational and portfolio (over 2 GW) for $2.5 billion. The investment also gave Total a seat on AGEL’s board.
world’s largest plant
Established in 2015, Adani Green is one of India’s largest renewable energy companies. Its operational renewable energy capacity is more than 16.6 GW and its target is to reach 50 GW by 2030. AGEN is also developing the world’s largest renewable energy plant on barren land in Khavra, Gujarat, whose area is five times larger than Paris, i.e. 538 square kilometers. Last September, Total Energies formed a joint venture with AGEL to jointly manage these solar projects with a total capacity of 1,150 MW. Total Energies agreed to invest $444 million to accelerate growth.
Partner in gas business also
Total and Adani also have a long-standing partnership in the gas business. Since 2018, the two have been running a joint venture – Adani Group and TotalEnergies each hold 37.4 per cent stake – that includes investments in city gas distribution, LNG terminal assets and gas marketing, including stakes in LNG terminals at Dhamra and possibly Mundra. The remaining 25.2 percent stake is held by public shareholders.
target to reduce debt
TotalEnergies is said to be considering the sale of several renewable energy assets in Asia in an effort to reduce its debt load. According to Reuters, last month the company announced plans to cut its annual capex by $1 billion to $15-17 billion per year between 2027 and 2030. The move is part of a broader effort to save $7.5 billion.