EBENE, Mauritius, Dec. 27, 2021 /PRNewswire/ -- Azure Power Global
Limited (NYSE: AZRE) (the "Company"), a leading independent
renewable power producer in India,
today announced certain operational and financial updates in
connection with the Rights Offering that was also announced
today.
This is not an offer to sell or purchase nor the solicitation of
an offer to sell or purchase securities and shall not constitute an
offer, solicitation or sale in any state or jurisdiction in which,
or to any person to whom such an offer, solicitation or sale would
be unlawful.
RECENT DEVELOPMENTS
In November 2021, the Company
signed PPAs with Solar Energy Corporation of India ("SECI") for 600 MWs at a fixed tariff
of INR 2.54 per kWh and, in December
2021, signed PPAs with SECI for a further 2,333 MWs at a
fixed tariff of INR 2.42 per kWh for supply power for 25 years, as
a part of the 4,000 MW manufacturing linked projects.
The Company has also received letter of awards (LOA), for its
first 120 MWs wind project and first 150 MWs solar – wind hybrid
project, from SECI. The Company further received LOA for 200 MWs
solar – wind hybrid project from Maharashtra State Electricity
Distribution Co. Limited (MSEDCL).
The Company is evaluating, and is in preliminary discussions,
with sellers of renewable energy assets in India that would complement its current
portfolio. Some of these assets may be sizeable and may result in
significant acquisitions. The Company's strategy is to continue to
build shareholder value and to evaluate acquisition opportunities
that satisfy criteria of value accretive returns.
During the second fiscal quarter ended September 30, 2021, the Company issued Solar
Green bonds (the "Bonds") of US$414
Million through its wholly owned subsidiary, Azure Power
Energy Ltd at coupon of 3.575% maturing in 2026. The proceeds from
the Bonds were used to repay the 5.50% US$
500 Million solar green bond issued in 2017 with a maturity
in 2022. The Bonds have a tenor of 5 years with amortisation and
waterfall structures and their issuance is a leverage-positive
transaction for the Company.
During the quarter ending September 30,
2021, the Company received a favorable order from the
Appellate Tribunal for Electricity ("APTEL") relating to ongoing
litigation in relation to the 40 MW Karnataka project having a
power purchase agreement with Gulbarga Electricity Supply Company
Limited (GESCOM). APTEL set aside the order of Karnataka Regulatory
Commission ("KERC"), wherein the KERC had reduced the extension of
time, reduced the PPA tariff and imposed liquidated damages.
Subsequent to the period ended September 30,
2021, the GESCOM has further filed an appeal with Supreme
Court against the order.
The Company also received a favourable order from Karnataka High
Court (Order dated December 02, 2021
in WP 5368 of 2020) for its 50 MW Solar Power Project in Karnataka,
against Hubli Electricity Supply Company Limited ("HESCOM"), i.e.
procurer DISCOM under its PPA, whereby HESCOM has been, inter alia,
directed to pay and clear all the outstanding dues payable by it in
relation to all the bills and invoices raised as on the date of
order and make prompt, regular and timely payments without any
delay in relation to future invoices. HESCOM has also been directed
to forthwith open or renew monthly irrevocable letters of credit in
terms of the PPA between the Company and HESCOM. Additionally,
general directions to all the DISCOMs in the State of Karnataka,
have been, inter alia, to issue, honour, discharge and fulfil their
duties, obligations and liabilities under the respective PPAs
including opening of letters of credit as per PPA and to make
prompt, regular and timely payments without any delay in relation
to future invoices raised by power generators in the State of
Karnataka.
During the current year, the Company received complaints and
anonymous whistle-blower reports which made various claims against
certain of the Company's Key Managerial Personnel, related to their
and the Company's actions in relation to the acquisition of and use
of land in Rajasthan, Assam and Uttar Pradesh, as well as certain
other corporate actions. The Company, through its Audit Committee,
and with the assistance of external counsel and forensic auditors,
has completed its investigation to determine whether the
allegations made in the complaints or contained in the
whistle-blower reports are substantive. The issues raised,
including those raised against Key Management Personnel, have been
closed and allegations were not substantiated; however, the Company
determined that its ethics policies regarding external consultants
should be enhanced. The Company, through its Audit Committee and
with the assistance of external counsel, will be taking remedial
steps (including training and policy review).
During the third quarter ending December
31, 2021, the Company received an unfavorable order from
appellate authority from the Mumbai Centre for International
Arbitration ("MCIA"), relating to arbitration proceedings initiated
by the Company's former chief executive officer in relation to his
transition agreement. The Company is in process of evaluating the
order received and will take necessary action in due course.
The Enforcement Directorate of India filed a Prosecution Complaint with a
special court in New Delhi on
October 1, 2021, in respect of an
earlier Enforcement Case Information Report wherein Mr.
Pawan Kumar Agrawal, the current
Chief Financial Officer of the Company, is one of those named and
charged with the commission of offences under Sections 3 and 4 of
the Prevention of Money Laundering Act, 2002 of India in relation to Mr. Agrawal's prior
employment. The relevant transactions that are the subject of the
complaint predated Mr. Agrawal's tenure as an employee and as Chief
Financial Officer of the Company, and the criminal charges are not
directed at, and do not concern, the Company or its subsidiaries.
The Company will continue to monitor the proceedings as Mr. Agrawal
defends the charges made against him.
Certain PPAs, particularly the PPAs executed with SECI require
the project developer to maintain its controlling shareholding
(more than 50% of the voting rights and paid-up share capital)
prevalent at the time of the signing of the PPA up to one year
after the commercial operation date; however, transfer of
controlling shareholding within the same group companies is
permitted with the permission of SECI after the commercial
operation date, subject to the condition that the management
control remains with same group companies.
In April 2021, the Supreme Court
of India while passing an order
for a petition filed under public interest litigation (PIL) aimed
at the conservation of two species of birds, the Great Indian
Bustard and the Lesser Florican, directed the states of Rajasthan
and Gujarat including developers having overhead transmission lines
in identified priority and potential area to take necessary steps
for conversion of overhead power lines to underground lines and in
the interim install bird diverters on the overhead lines. However,
in the non-feasibility of converting high voltage lines to
underground lines, the matter can be referred for technical
evaluation by a committee set up by Supreme Court. The conversion
of overhead cables into underground power lines, wherever
considered feasible by such committee, is to take place within a
period of one year. The order of the Supreme Court mentioned the
pass through of such expenses incurred by the power developers to
the ultimate consumer, subject to approval of the Competent
Regulatory Authority. The Company and other players in the industry
through Solar Power Developer Association. as well as, Union of
India (Ministry of New and
Renewable (MNRE) have submitted a modification application to
Supreme Court of India, seeking
allowance for laying of over-head transmission lines outside
priority areas as well as inside priority areas if the lines are of
high/extra high voltage of 33 kV or above and to examine on
case-to-case basis study for requirement of undergrounding even for
33kV and lower in priority area. The Management has preliminarily
assessed that any costs incurred to comply with the said order are
likely to be substantially or wholly recoverable by the Company
under provisions of change in law and/or force majeure of their
respective PPAs in due course following the prescribed procedure
under the respective PPAs and law.
View the complete update at:
https://mma.prnewswire.com/media/1716671/Operational_and_financial_Update.pdf
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SOURCE Azure Power