ICRA Downgrades Reliance Power’s Debt, Subsidiaries’ Bank Facilities
Poor liquidity profile prompts ICRA to downgrade Reliance Power’s debt, subsidiaries’ bank facilities.
Credit ratings agency ICRA downgraded its outlook on Reliance Power Ltd.’s outstanding debt of Rs 8,015 crore, which includes long-term and short-term components, from BBB to BB with an “issuer not cooperating” comment.
ICRA said in a research note this was due to the poor liquidity profile of Reliance Power’s subsidiaries, impacting its surplus cash flow.
Ratings on the bank facilities of its subsidiaries—Rosa Power Supply Company Ltd. and Vidarbha Industries Power Ltd.—have been downgraded to “[ICRA]BB+ (Negative) /[ICRA]A4+”. The note said the power company didn’t provide a no-default statement for May and June. The agency was unable to validate whether Reliance Power has been meeting its debt-servicing obligations in a timely manner.
ICRA said the outlook on the Anil Ambani-led company may be revised to stable following monetisation of its non-core assets, reduction in debt and satisfactory progress on the execution of its gas-based power project in Bangladesh.
A spokesperson for Reliance Power was yet to respond to BloombergQuint’s emailed queries.