Ratings agency Crisil said on Thursday that ratings for Adani Power for bank loan facilities of Rs 6,559.19 crore are classified as “non-cooperative”. It said these were based on best available information with it as the company did not provide the requisite information needed to conduct the rating exercise.
“The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix ‘issuer not cooperating’. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company,” Crisil said.
The agency reaffirmed its Crisil BB-/Stable ratings on the bank facilities of Adani Power and said the reaffirmation factors in the order of the Supreme Court in April 2017, which disallowed relief in the form of compensatory tariff due to change in Indonesian coal regulations, leading to continued under-recoveries in the company’s revenue.
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On March 30, 2017, Crisil had reaffirmed its rating on the bank facilities of Adani Power at Crisil BB-/Stable. It had also placed its rating on letter of credit, bank guarantee, and working capital facility on “Notice of Withdrawal” for 90 days in line with its policy. Additionally, Crisil had withdrawn its rating on the long-term loan facilities of Rs 11,602.33 crore as there was no outstanding against them and the withdrawal was in line with the policy.
In Q4FY17, Adani Power had to reverse Rs 3,650 crore of compensatory tariff (CT) booked on its Mundra power plant following the Supreme Court’s adverse ruling on pass-through of increase in Indonesian coal prices.
The company told analysts that it expects domestic linkages from Coal India (CIL) to meet coal requirements for much of the 10.4 GW capacity. However, analysts believe that CIL will not be able to honour its existing contracts in totality (factoring in 80% of CIL’s commitment for Mundra IV – 3×660 and Tiroda I – 3×660 to be met based on draft revised fuel supply agreements circulated by CIL) due to current problems in scaling up and logistics (rake availability).
According to them, the only issue was in the debt-to-equity ratio of Adani Power Mundra. The company had commercialised its first unit of 330 MW at Mundra, Gujarat, in 2009 and scaled up plans to build India’s largest and one of the world’s top five single-location thermal power plants with a capacity of 10,440 MW.