Billionaires: Gautam Adani will raise $2.5bn from a renewables deal with Total

Fortnightly round-up on the world's wealthy finds stake sale helps the tycoon to cut group debt, while Paul Singer’s hedge fund pulls out of Hong Kong and Russian companies line up to list

Gautam Adani added $22.5bn to his net worth last year to become India’s second-richest man, according to the Bloomberg Billionaires Index. Photo: Getty Images

Gautam Adani

Indian billionaire Gautam Adani is raising $2.5bn from a deal that includes the sale of a minority stake in his renewables business to French energy giant Total, a transaction that may help the tycoon cut group debt.

Paris-based Total will acquire 20 per cent of Adani Green Energy and a board seat as well as a 50 per cent stake in a portfolio of operating solar assets with 2.35 gigawatts capacity, the company said. Shares of Adani Green have more than quadrupled in value in the past year in Mumbai, giving the company a market value of about $20bn.

“Primarily, this fund infusion will help Adani lower its leverage,” said Chakri Lokapriya, chief executive at TCG Asset Management in Mumbai. “Thanks to a series of deals, Adani is highly leveraged at this point of time.”

The Adani group, which started off as a commodities trader in 1988, has grown rapidly to become India’s top private-sector ports operator and power generator. In 2019, Mr Adani started focusing on airports, and now he’s trying to enter sectors including data storage and financial services.

The group had overall gross debt of 1.74 trillion rupees ($24bn) as of September 30, according to a November report from Credit Suisse. Adani Enterprises, the biggest listed company in his group, had about $1.7bn of consolidated debt as of March 2020, according to Brickwork Ratings.

The latest transaction marks Total’s third commitment to the Adani group. In 2019, the French firm spent $600 million to buy a 37.4 per cent stake in Adani Gas, now called Adani Total Gas, and in February last year it acquired 50 per cent of a solar assets joint venture.

“India is the right place to put into action our energy transition strategy based on two pillars: renewables and natural gas,” Total chief executive Patrick Pouyanne said.

Mr Adani added $22.5bn to his net worth last year to become India’s second-richest man, according to the Bloomberg Billionaires Index.

Paul Singer

Activist investor Elliott Management plans to close its office in Hong Kong and move its staff to offices in London and Tokyo, according to a person familiar with the matter.

The New York-based hedge fund, run by billionaire Paul Singer, has been winding down its Hong Kong operations in recent years, and had fewer than 20 employees there when it stopped trading and investment activities on January 1, the person said.

The shift began in early 2018, when the firm’s then-head of Hong Kong, James Smith, moved to London and began running its Asian operations from the UK. Mr Smith left the firm the following year. Since then, the bulk of Elliott’s Asian operations have been run out of London and Tokyo, including its recent activist campaigns at SoftBank Group and Unizo Holdings, the person said.

At the time of Mr Smith’s departure, there were fewer than 40 employees in the Hong Kong office.

Elliott has run several other activist campaigns in the region over the years, including pushing for changes at Hyundai Motor, Samsung Electronics and the Bank of East Asia, among others.

While much of its recent activist campaigns in Asia in recent years centred on South Korea and Japan, it engaged in years-long court proceedings to push Hong Kong-based Bank of East Asia to sell itself. Under pressure, the bank agreed to start a process of selling its life insurance unit last year.

Elliott, which was founded by Mr Singer in 1977, had more than $45 billion in assets under management at the end of 2020.

Vladimir Evtushenkov

Russian billionaire Vladimir Evtushenkov is considering an initial public offering of wood, paper and packaging producer Segezha Group after an e-commerce operator he holds a stake in notched the most successful Russian market debut in nearly a decade last November.

Mr Evtushenkov’s Sistema is preparing Segezha for a listing in 2021, the investment company said. A formal decision to sell shares hasn’t been made yet, it said.

Online retailer Ozon Holdings, part-owned by Sistema, listed in New York last year in a sign that Russian companies are returning to the market after a long hiatus. State-owned tanker operator Sovcomflot also sold shares in the fourth quarter.

A dozen Russian companies are considering IPOs and as many as six could try to sell shares in the first half of 2021, Dmitry Brodsky, Renaissance Capital’s head of equity capital markets for Russia & the CIS, said in December.

Video-streaming platform Ivi.ru and retailer Fix Price have said they are considering selling shares this year, although Ivi.ru later delayed its plans due to a proposal to limit foreign ownership of video-streaming services.

Segezha may be valued at about 60bn roubles ($808m), Sova Capital analysts said in a research note.

Ajay Piramal

Billionaire Ajay Piramal’s conglomerate won the bidding for bankrupt Indian shadow lender Dewan Housing Finance, advancing a keenly watched insolvency that’s been a test of the country’s bankruptcy system.

A resolution plan for Dewan from Piramal Enterprises’ own shadow bank, Piramal Capital & Housing Finance, was approved by Dewan’s committee of creditors in a vote. People familiar with the matter had said that Piramal received almost 94 per cent of the votes, while rival Oaktree Capital got less than half.

For Piramal, taking over rival Dewan would help the conglomerate double down on its real estate-focused shadow banking business. The development also brings some resolution to a key case in India’s insolvency system, where high profile cases have at times lingered on for years. Dewan was put into an insolvency process after it was seized by the central bank in a shock move in late 2019.

The saga of Dewan, once one of India’s biggest shadow lenders, had also captivated global money managers. More than two dozen firms, including Goldman Sachs and Morgan Stanley, showed initial bidding interest before the list of potential suitors narrowed.

That bidding contest showed interest in the nation’s soured bank loans, which stood at about 7.7tn rupees ($105bn) in the latest data at the end of September. A new wave of investors have bet they can eke out profits from India’s rising number of capital-starved businesses struggling to stay afloat amid the pandemic.

Shadow lenders like Dewan are crucial to India’s economy, lending to small merchants and tycoons alike. The non-bank financing industry fell into crisis in 2018 when financier IL&FS Group suddenly stumbled, and the pandemic has added to strains. Policymakers have stepped in with support, channelling liquidity to the sector last year.