UPDATE 1: 2:54 a.m. ET 11/27/2023: Azure Power Global, which is mulling a consent solicitation to amend certain covenants of its USD bonds, is likely to pay a consent fee of at least 50 cents to bondholders, three sources close to the situation said. Azure is particularly considering a relaxation of covenants related to information disclosure amid a continuing delay in completing its audit for the fiscal year ended March 31, 2023, the sources said.
While the company is certain there is no risk of default due to the delay in completion of the audit - despite the recent
delisting from the New York Stock Exchange, or NYSE - it is keen on soliciting bondholder consent as well as partly prepaying up to around $50 million in aggregate of its outstanding USD bonds due in 2024 and 2026 as a confidence building measure, the sources said.
The company has outstanding $350.1 million 5.65% bonds due December 2024 and $392.18 million 3.575% bonds due August 2026.
Azure Power Global’s earnings for the fiscal year ended March 31, 2023 are expected to be delayed beyond January 2024, as reported.
The company has held discussions regarding the consent solicitation with key bondholders who are part of an
ad hoc group, or AHG, which formed earlier this year amid concerns over the delay in disclosure of audited financials for fiscal years 2022 and 2023, the sources said, adding that the
new management has been talking to USD bondholders and onshore financial creditors on a regular basis.
Meanwhile, the prepayment of its outstanding due December 2024s and due August 2026 bonds will be done from cash available at the restricted groups, or RGs, as reported. As part of the consent solicitation process, the company will also seek bondholder approval to use the cash at the RGs, the sources said. As of March 31, 2022, a total of INR 3.72 billion ($44.59 million) of cash, cash equivalents and other bank balances were available at the two RGs, according to
audited financials disclosed by the company.
The company will also be seeking relaxation from its financial creditors onshore to accommodate the delay in completion of its audit, the sources said, adding that Azure has approval only until December from onshore lenders. The company is expected to get an extension from onshore lenders to complete its audit , the sources said.
An Azure spokesperson did not respond to an email requesting comment.
–Malvika Joshi, Dipika Lalwani
Original Story 3:00 a.m. UTC on Nov. 24, 2023
BREAKING: Azure Likely to Solicit Bondholder Consent to Tweak USD Bond Terms Amid Delay in FY23 Audit
Azure Power Global, delisted from the New York Stock Exchange in November, is likely to solicit consent from its USD bondholders next week to tweak certain covenants of its USD bonds pertaining to information disclosure as it now expects the audit of its financials for the fiscal year ended March 31, 2023 to be delayed beyond January 2024, two sources close to the situation said. The company has held discussions with key bondholders ahead of launching the consent solicitation, the sources said.
The Indian renewable energy producer is also planning to repay early part of its outstanding $350 million 5.65% bonds due December 2024 and $392 million 3.575% bonds due August 2026 with existing cash at restricted groups, the sources said.
Azure Power did not respond to requests for a comment.
More to follow…
–Malvika Joshi