CARE reviews the ratings of Sasan Power; Reliance Power does not agree
New Delhi, July 6 () Reliance Power Saturday said that the CARE rating agency has reviewed the long and short term ratings of its subsidiary Sasan Power due to a significant weakening in the financial risk profile of the parent company.
The rating agency has also cited the continued uncertainty about the implementation of the compensatory rate towards the change in the law during construction and currency variations as reasons for the revision.
Reliance Power said it strongly disagrees with the revised ratings assigned by CARE.
CARE has reviewed the long and short term ratings of the Reliance Power subsidiary, Sasan Power Ltd, to CARE BB + (negative outlook) and CARE 4, respectively, due to a significant weakening in the financial risk profile of the parent company along with a continuing uncertainty about compensation. The implementation of tariffs for the change in the law during construction and foreign exchange variations, the company said in a regulatory presentation to the stock exchanges.
Reliance Power said the 3,960 megawatts (MW) Sasan UMPP are operating at 97 percent PLF (plant loan factor) per year to date in fiscal year 2019-2O and it remains the best power plant among the large power plants in the country.
The performance of the power plant is strongly supported by the optimal and efficient operating performance of its captive coal mines that deploy the most modern and productive equipment and are the largest coal mines by volume handled in the country.
With its competitive tariff, Sasan is placed at the top of the Merits Dispatch (MOD) stack and has an excellent record of fees from the Procurators that Sasan has covered a substantial part of its foreign currency debt, he added.
Reliance Power said that Sasan has always been regular in debt service without receiving the support of his parent company since the beginning of the project. The company strongly disagrees with the revised ratings assigned by CARE ... The company believes that CARE has not adequately taken into account the strengths of the previous ratings, while assigning the revised ratings, Reliance Power said. SVK MR MR