Azure Power India in talks with lenders to modify loan terms

economictimes.indiatimes.com:

Azure Power India is in talks with their onshore lenders to modify the terms of the ₹1,680-crore loans, which gives banks the right to increase the pricing on the rupee loan or even recall the debt facilities if the rating is downgraded from the current level, said a research report. Last week, Crisil Ratings downgraded the loan facility of Azure Power India to BBB+, citing a delay in releasing audited results for the financial year ending March 2022.

If the rating is lowered by one notch to BBB or two notches to BBB-, lenders would have the right to reprice or recall the loans, according to a research report by Nomura released on Tuesday.Yes Bank, IndusInd Bank, Axis Bank, DCB Bank, Kotak Infrastructure Debt Fund, Indian Renewable Energy Development Agency, and Tata Cleantech Capital are among the lenders of Azure Power India, shows a recent rating report by Crisil. On July 13, the New York Stock Exchange suspended trading of Azure Power Global, the parent company of Azure Power India, citing the renewable power producer's failure to disclose annual results for FY22 within the mandated July 15 deadline.

Delisting of shares implies a breach of covenant and triggers a technical default on Azure Power Global's two offshore bonds — worth $350 million due in December 2024 and $414 million due in August 2026. In its report, Nomura also said that Azure may consider maturity extension for a portion of a principal bond maturing 2024 'if the company fails to obtain alternative onshoring finance'.

At the same time, if the bondholders consider an option to accelerate debt payments (due to the event of default), it could open another can of worms, the research report said. This is because the company «apparently does not have