23 March 2021
PIMCO, US-based investment giant which in 2020 was the biggest known boldholder in Adani Ports, has prohibited any future investment in the company and has confirmed that it did not invest in Adani Ports’ most recent bond issue in January. This is due to Adani Ports’ involvement in the climate-wrecking Adani Carmichael coal project.
When, in August 2020, it came to light that Adani Ports-owned Bowen Rail Company (BRC) was setting up the haulage operation for the Carmichael coal mine, Market Forces reached out to PIMCO and parent company Allianz to inform them of this link. Over the next few months Market Forces and our supporters engaged with PIMCO and Allianz staff members on the issue, and was informed in February 2021 that PIMCO had banned Adani Ports as an investment.
Managing US$2.21 trillion of investments globally and an estimated US$100 million in Adani Ports bonds, PIMCO’s exit from future investment is a massive blow to the company and sends a strong signal to the Adani Group that all of its companies are exposed to the reputational risks created by the Carmichael project.
While Carmichael itself has been shunned by over 90 companies, Adani Ports has only recently felt the impacts of its association with the mine, with Deutsche Bank in January reportedly refusing to arrange bonds for Adani Ports due to ‘conflict with the sustainability goals of the bank’. PIMCO has now delivered a major second blow just days after S&P Global revealed it will review the inclusion of Adani Ports on its Dow Jones Sustainability Index (DJSI). The review was prompted by human rights and environmental groups presenting evidence of Adani Ports’ participation in the Carmichael project and business dealings with the Myanmar military. Read our blog post here.
As far as Market Forces can determine, PIMCO has never taken a public position against investing in a specific company on ESG grounds. This demonstrates the increasing investor sensitivity to the significant reputational damage that association with the Carmichael thermal coal project brings.
Adani Ports regularly taps the international bond market with four major foreign currency bond issues between 2019-2021. Exits from bond arrangers like Deutsche Bank and now from bond investors like PIMCO, could translate to a critical shift in finance sector support for major Adani companies due to the Group’s links to the Carmichael mega-mine.
This happened to Adani’s Abbot Point Terminal (now called North Queensland Export Terminal), which had to cancel a bond issue in March 2020 and hasn’t issued one since, with an exodus of investors that same year and debt having to be repaid out of Adani’s own pocket. The failed March 2020 bond issue was to be handled by low-tier banks CLSA (which has since committed to no more work for Adani), Stifel, Haitong and Emirates NBD Capital.
Let’s keep up the pressure on Adani Ports’ investors and bankers so that Adani’s executives understand that as long as Carmichael exists, the whole group will be haunted by the reputation risks of the toxic mega-mine.