Adani’s Mundra power plant has accrued USD 1.8 billion in losses and more liabilities than assets, according to a Bloomberg report. The report also stated that the conglomerate used more than USD 1 billion in innovative debt financing to cover the deficit and reassure lenders and investors that profits would soon follow.
The auditor for Adani Power, however, as well as accounting specialists who talked with Bloomberg, are unable to fully understand the math supporting this claim. The Mundra Thermal Power Plant is an example of this balancing act, where a single asset write-down could have cascading effects, according to the Bloomberg report.
Experts have said that the debt associated with the plant appears to be designed to protect Adani Power from extraordinary write-offs, regardless of the unit’s losses.
Stocks of the Adani Group suffered on the exchanges after US-based short seller Hindenburg Research issued a long list of accusations against it last month, including fraudulent transactions and share price manipulation. The organisation has denied the accusations and said that it complies with all legal and disclosure standards.
To convince investors that the company’s finances are in order, Adani group management, including the group chief financial officer held roadshows in Singapore and Hong Kong last month. From March 7 to March 15, these will be expanded to Dubai, London, and the US.
