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Azure Power looks to buy back $60-M offshore bonds at par

Mumbai: Azure Power Global has proposed to buy back a portion of its offshore bonds at par to signal its willingness to repay debt, said people with knowledge of the matter.

The move to buy back shares is seen as an attempt by the company to boost investors’ confidence, which suffered a setback after its shares were delisted in July by the New York Stock Exchange due to its failure to disclose FY22 annual audited results within the mandated deadline. It eventually published its results on October 12, 2023.

The company initiated a consent solicitation process for buyback bonds totalling $60 million issued by two special-purpose vehicles.

Azure Power Solar Energy, the issuer of $350 million 5.65% Senior notes due in December 2024, has proposed to buy back $40 million bonds by March 2024.

Azure Power Energy, the issuer of $414 million 3.575% senior notes due in March 2026, has proposed to buy back bonds in two tranches – $12 million by March 2024 and $8 million by August 2024.The India based power renewable company backed by Canadian funds- CDPQ and OMERS Infrastructure, which jointly holds a 75% stake. Azure Power India is a wholly owned subsidiary of Azure Power Global.Azure Power Global has initiated a consent solicitation process for the buyback of the bonds wherein it has offered a consent fee of $6 for every $1,000 principal amount held by holders. A consent fee is paid to noteholders who agrees to changes the terms of the bonds.

The company has also sought consent to delay publishing its FY23 audited annual results by April 30, 2024, and half-yearly annual results for September 2023 by June 30, 2024.
The company has sought an extension twice to publish its annual results for FY23– once in September 2023 and later to the end of December 2023.

“The buyback of bonds is a goodwill gesture to get bondholders’ consent for extending the deadline to publish audited results for FY23,” said a person familiar with Azure’s offer.

The company has set December 7 as the deadline for bondholders to give their consent to the bond buyback offer.

Holders of Azure Power Global’s two offshore bonds appointed Akin Gump Strauss Hauer & Feld as the adviser “to protect” their interest, ET reported on July 6. The delisting of Azure from NYSE led to a breach of covenant, resulting in a technical default, as per the terms of bonds issued by the company. However, Azure immediately told analysts that there is no technical default on the dollar bonds.

S R Batliboi & Co, an Ernst & Young (EY) Global affiliate, resigned as auditor of Azure Power Global just days ahead of the mandated July 15 deadline for the company to disclose its financial results for FY22.

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