Fitch Ratings downgrades dollar-denominated bonds of 2 cos of Azure Power Global

Fitch Ratings on Monday said it has downgraded ratings on US dollar-denominated bonds of Azure Power Energy and Azure Power Solar Energy.

“Fitch Ratings has downgraded Azure Power Energy’s (Azure RG3) US dollar bond to ‘BB’ from ‘BB+’ and Azure Power Solar Energy Private’s (Azure RG2) US dollar bond to ‘BB-‘ from ‘BB’. All ratings remain on Rating Watch Negative,” the ratings agency said in a statement. On the rationale behind the move, it said the downgrade reflects corporate governance concerns evident from prolonged failure of management to manage regulatory financial disclosures past statutory timeline.

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In addition, the rating watch negative reflects the continued lack of clarity in relation to the impact of Azure Power Global Limited’s (APGL) unresolved internal controls and compliance framework matters, and the recent changes in management, on overall performance and financial flexibility of the restricted groups. APGL, the holding company of the two companies, missed its statutory deadline in filing its Form 20-F audited financial statements for its financial year ended March 2022 with the US Securities and Exchange Commission (SEC) in August 2022.

Further, there is still no clear indication on the group publishing its audited financial statement, and further delays could lead to delisting from the New York Stock Exchange. “Management has failed to anticipate and manage regulatory financial disclosures on time. APGL cited ongoing review of its internal control and compliance framework as the cause of the delay in filing its annual report with the US SEC,” it said.