The disorder is widespread at an Indian solar energy producer controlled by the Caisse de depot et placement du Québec (CDPQ). In one day, Azure Power Global saw its auditor – tasked with combing through its finances – throw in the towel in addition to being shown the door to the New York Stock Exchange.
This does not bode well for this important placement of Quebecers’ woolen socks. The value of the 600 million that was injected into the company has plummeted by several hundred million dollars. Azure has been in turmoil since last August over allegations raised by a whistleblower about irregularities and questionable practices.
Details of an internal investigation and results audited by an external auditor for the fiscal year ending March 31, 2022 – more than 15 months ago – are still pending. Even after being granted a six-month grace period, Azure was unable to meet the Saturday (July 15) deadline set by the New York Stock Exchange. His listener also decided to jump ship.
S. R. Batliboi
Another element of concern to the expert: the new auditor, ASA
“Studies tell us that when a company is having trouble, hiring a reputable firm helps reassure the market,” says Duguay. It makes you wonder if the four firms refused to get involved. »
As has been the case for about a year, the Caisse did not want to comment on the precariousness of Azure’s financial situation.
On Wall Street on Thursday, it was no longer possible to trade shares of Azure. After the markets closed, the New York Stock Exchange confirmed the inevitable: the time has come to begin delisting proceedings. Azure will need another 14 weeks before it can present its 2022 financial statement to investors.
“However, the company can appeal any decision,” Azure said in a statement. In the event of delisting, the company will make all reasonable efforts to maintain a trading alternative for its shareholders. »
On the New York floor, the title of the solar energy producer has been battered since its peak of US$48, reached in the winter of 2021. On Thursday, it was worth only US$1.69. This gives a value of 58 million US (77 million CAN) to the 34.25 million shares of CDPQ.
The institutional investor has a say in board and management appointments. But if a “complete mess” reigns within the energy producer, efforts to straighten things out could be like a sword in the water, the Yale University professor believes.
“The Caisse may do everything possible,” Duguay said. But when there is a complete mess internally, it can become very complex. The question is whether the CDPQ has the expertise to relieve a company in Azure’s situation. Does she have the ability to do this? »
In an attempt to reassure investors, the Indian company gave an overview of some unaudited financial indicators. For the fiscal year ended March 31, its revenue would have climbed 14% to $257 million. It is not known, however, whether any profits were made. Debt fell slightly to $1.6 billion.
Last January, Azure warned that it might have difficulty meeting its financial obligations. She needs money to repay her loans and fund her growth. The company has been downgraded by major rating agencies like Fitch and Moody’s on more than one occasion.
“It will be difficult to convince outside investors to come and invest if we need the money,” Duguay said. This shows the seriousness of the situation. »
Azure’s second largest shareholder is the Ontario Municipal Employees Retirement System (OMERS) with a 22% stake.
August 2022
Azure announces the unexpected departure of its boss, and potential internal irregularities. Its stock plummets 44% on the New York Stock Exchange.
January 2023
We discover new skeletons in the closet at Azure. The company warns that it could run out of money to fund its ambitions. The internal investigation is continuing.
May 2023
The extent of the internal irregularities is still unknown, but a new boss and a finance manager are appointed.
July 2023
Azure sees its auditor resign. She is still unable to take stock of her finances and the New York Stock Exchange shows her the door.
