TotalEnergies has been in discussions to sell its renewable energy business in Asia. This move is just one piece of a larger plan to lighten its growing debt load. Those assets could be worth up to a billion dollars, indicating just how big a step this would be for the company. These efforts, headed up by company CEO Patrick Pouyanné so far, include hiring an adviser to gauge interest from potential buyers.
Asia’s renewable energy portfolio is as diverse as its culture. It’s full of inspiring projects such as offshore wind farms in Taiwan and South Korea, as well as solar plants in Indonesia and Australia. By divesting these assets, TotalEnergies aims to streamline its operations and focus on more profitable markets, particularly in regions like India and South Africa.
Strategic Asset Management
TotalEnergies is reportedly in the advanced stages of selling its renewable assets in Asia. The company is currently in talks to sell other Nigerian assets to two separate companies. The company has certainly demonstrated that they are focused on continuing to improve their approach to asset management. Recently, it’s run through the divestment of shale holdings in Argentina, and wind and solar assets in France.
TotalEnergies has made progress on its debt, having just this past quarter reported a drop. The company, a spinoff of former automotive giant Delphi, projects continued fiscal progress by year’s end. They intend to divest assets, which will save an estimated $2b from various markets such as the US, Norway, and Nigeria.
Focus on Renewable Growth
Similar to what TotalEnergies is doing to lower its debt, the company is looking to double down on its presence in chosen renewable markets. The conglomerate is reportedly looking to sell or partially divest its 19% stake in Adani Green Energy. In a September investor presentation, CEO Patrick Pouyanné touted the company, telling investors it was a “great company.” This shift aligns with TotalEnergies’ broader ambition to expand its power business. Of special note, it hones in on deregulated markets such as Europe, the US and Brazil.
The shift toward renewable energy highlights TotalEnergies’ desire to improve their environmental sustainability practices and address shifting demands as people around the world change how they consume energy. The company is reorienting its resources to focus on the most promising markets and technologies. We expect this move to reduce financial pressures and to position it as a leader in the rapidly-growing renewable energy industry.
Future Outlook
TotalEnergies’ current activities suggest a desire to be aggressive on both cost containment and market growth. The decision to engage financial advisers early, to help sense the level of interest from prospective buyers, is another mark of the company’s strategic acumen. In showcasing a deft strategic touch, TotalEnergies cuts through the torturous decision making. Simultaneously, it prevents the debt burden from eating into emerging opportunities in the renewable energy market.