- Azure Power's first ever asset sale reaffirms commitment to
capital discipline
- Transaction expected to be accretive to run rate Cash Flow
to Equity (CFe) and reduce general and administrative (G&A)
expenses
NEW DELHI, April 5, 2021 /PRNewswire/ -- Azure Power Global
Limited, a leading solar power producer in India, announced it has signed a binding
agreement to sell its non-core solar rooftop portfolio to Radiance
Renewables Pvt. Ltd. (Radiance), one of India's leading providers of competitive
renewable energy solutions for commercial, industrial and
residential customers and a 100% subsidiary of the Green Growth
Equity Fund ("GGEF"), India's
leading Climate fund, managed by EverSource Capital, for a
total consideration of INR 5,365 million (US$ 73.5 million1) subject to purchase
price adjustments. The rooftop portfolio generated INR 331
million (US$ 4.5 million1)
in EBITDA for the 12 months ending December
30, 2020. After excluding rooftop revenues, our new FY'22
revenue guidance is INR 17,200 – 18,200 million (or US$ 236 - $249
million1). In addition, the company now expects
G&A (excluding stock compensation expenses and transaction
costs) to be ~US$ 20 million compared
to our previous guidance which assumed ~US$
22 million inclusive of the rooftop portfolio. The
company also expects the run rate CFe to improve as a result of
this transaction. The company further expects to take an estimated
INR 2,900 – 4,400 million (US$ 40 -
$60 million1) one-time
charge subject to purchase price adjustments and other conditions
related to this sale. Proceeds are expected to be received
before December 31, 2021. KPMG was
the financial advisor and Trilegal was counsel to Azure Power on
this transaction.
The rights of our Green Bond owners have been protected in
respect of the 42.7 MWs that are part of the Restricted Groups (as
defined in the respective Green Bond Indentures). As part of the
sale agreement, 48.6% of the equity ownership in the 42.7 MWs will
be transferred to Radiance, and the remaining 51.4% will be
transferred post refinancing of our Green Bonds. All of the cash
flows related to such 42.7 MWs are to remain in the SPV to service
debt and cannot be up streamed until such refinancing and the
remaining 51.4% equity ownership in the 42.7 MWs is transferred to
Radiance. In the event transference does not occur, the company
must reimburse Radiance the equity value of the assets not
transferred along with an INR 10.5% per annum equity return.
Speaking on this occasion, Mr Ranjit
Gupta, Chief Executive Officer, Azure Power said, "This
sale, the first ever asset sale in Azure Power's history,
illustrates the company's commitment to capital discipline. The
sale of this non-strategic portfolio allows us to enhance returns
on invested capital through efficiency gains and cost optimisation
whilst recycling capital into higher return, committed projects.
Our focus is on creation of shareholder value."
On this announcement, Manikkan Sangameswaran, Executive
Director, Radiance Renewables said, "This strategic acquisition
will position Radiance as a significant pan India player in the Commercial, Industrial and
Institutional segments with exposure to long term power purchase
agreements with quality customers based on net metering in the
build out of its distributed generation platform. This transaction
allows Radiance to bring its high quality asset management skills
to improve asset performance given its focus on enhancing and
delivering value to its stakeholders. We plan to introduce
cutting-edge asset management tools such as real-time monitoring
with analytics and aim to make Radiance a leading Renewable Energy
as a Service (REaaS) player in India."
1The exchange rate of INR 73.01 to US$1 at the New
York closing rate of December 31,
2020
About Azure Power
Azure Power (NYSE: AZRE) is a leading independent solar power
producer with a pan-India
portfolio of 6.9 gigawatts on February 28,
2021 of which 2.0 GWs are operational, 0.9 GWs are under
construction and 4.0 GWs have received a Letter of Award but for
which PPAs have yet to be signed. Azure Power developed
India's first private utility
scale solar project in 2009 and has been at the forefront in the
sector as a developer and operator of solar projects since its
inception in 2008. With its in-house engineering, procurement and
construction expertise and advanced in-house operations and
maintenance capability, Azure Power manages the entire development
and operation process, providing low-cost solar power solutions to
customers throughout India. For
more information, visit: www.azurepower.com.
About Radiance Renewables Private Limited
Radiance Renewables Private Limited ("Radiance") is one of
India's leading providers of
competitive renewable energy solutions for commercial, industrial
and residential customers enabling them to achieve their
sustainability goals.
Radiance is a 100% subsidiary of the Green Growth Equity Fund
("GGEF"), India's leading Climate
fund, managed by EverSource Capital, with cornerstone investments
from India's National Investment
and Infrastructure Fund ("NIIF") and Foreign, Commonwealth and
Development Office ("FCDO") of the UK government. EverSource
Capital is a 50:50 joint venture between Everstone Capital, one of
Asia's premier multi-asset
investment firms, and Lightsource bp, a global leader in
renewables, with a global portfolio of more than 21 GW under
development, construction and operation.
Radiance has created and now manage an operational capacity of
95 MWp across Maharashtra, Tamil Nadu, Karnataka, Chhattisgarh,
Telangana and Rajasthan covering a total of 13 sites and currently
has close to 40 MWp of projects under construction and another 60
MWp under development. It continues to build more projects under
Open Access and Behind the Meter, targeting a portfolio of 1.5 GW.
For more information, visit www.radiancerenewables.com and follow
us on LinkedIn.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended and the Private Securities Litigation Reform Act of
1995, including statements regarding the Company's future financial
and operating guidance, operational and financial results such as
estimates of nominal contracted payments remaining and portfolio
run rate, and the assumptions related to the calculation of the
foregoing metrics. The risks and uncertainties that could cause the
Company's results to differ materially from those expressed or
implied by such forward-looking statements include: the
availability of additional financing on acceptable terms; changes
in the commercial and retail prices of traditional utility
generated electricity; changes in tariffs at which long term PPAs
are entered into; changes in policies and regulations including net
metering and interconnection limits or caps; the availability of
rebates, tax credits and other incentives; the availability of
solar panels and other raw materials; its limited operating
history, particularly as a new public company; its ability to
attract and retain its relationships with third parties, including
its solar partners; its ability to meet the covenants in its debt
facilities; meteorological conditions issues related to the corona
virus; supply disruptions; power curtailments by Indian state
electricity authorities and such other risks identified in the
registration statements and reports that the Company has filed with
the U.S. Securities and Exchange Commission, or SEC, from time to
time. All forward-looking statements in this press release are
based on information available to us as of the date hereof, and the
Company assumes no obligation to update these forward-looking
statements.
Investor Contact
Nathan
Judge, CFA
ir@azurepower.com
Media Contact
Samitla Subba
pr@azurepower.com
Phone: +91-11-4940 9854
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