ICRA revises ratings of Reliance Power's subsidiary, company disagrees

Credit rating agency ICRA has revised the long-term and short-term ratings of Sasan Power Limited, a subsidiary of Reliance Power, citing deterioration in financial risk profile of Anil Ambani-led group company

By BusinessToday.In  
Tuesday, June 25, 2019

Credit rating agency ICRA has revised the long-term and short-term ratings of Sasan Power Limited, a subsidiary of Reliance Power, citing deterioration in financial risk profile of Anil Ambani-led group company.

"ICRA has revised the long-term ratings of Sasan Power to '[ICRA] BB+' and short-term ratings to '[ICRA] A4', attributing to deterioration in financial risk profile of Reliance Power Group and the uncertainty regarding regulatory approval of tariff matters relating to change in law during construction and forex variation," Reliance Power said in a filing to the Bombay Stock Exchange.

However, the Reliance Anil Dhirubhai Ambani Group (ADAG) company disagreed with the revision in the ratings. It believes that ICRA has not appropriately factored in its rating strengths while assigning the revised ratings.

"The company strongly disagrees with the revised ratings assigned by lCRA," RPower said in the exchange filing.

According to RPower, the 3,960 MW Sasan UMPP is operating at 97% PLF for year to date in FY2019-20 and continues to be the best performing power plant among such large sized power stations in the country.

"The power plant performance is strongly supported by optimal and efficient operating performance of its captive coal mines, which deploy most modern and productive equipment and are the largest coal mines by volume handled in the country," it said.

Commenting on the tariff issue, RPower said "With its competitive tariff, Sasan is placed on the top of Merit Order Dispatch (MOD) stack and has an excellent track-record of collections from Procurers. Sasan has hedged substantial portion of its foreign currency debt."

The company further stated that Sasan has always been regular on debt service without taking any support from its parent company since inception of the project. Sasan has already received positive order from APTEL for tariff matters relating to Change in Law during construction, it added.

Edited by Chitranjan Kumar

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