(ADPnews) - Nov 17, 2010 - CRISIL rating agency on Tuesday lifted the rating on the bank facilities of SuryaChambal Power Ltd to BBB-/stable from BB+/stable.
The agency issued the following press release:
Rs.96.0 Million Term Loan (Reduced from
Rs.273.0 million) BBB-/Stable (Upgraded from BB+/Stable)
Rs.55.0 Million Working Capital Demand Loan BBB-/Stable (Upgraded from BB+/Stable)
Rs.45.0 Million Overdraft Facility BBB-/Stable (Upgraded from BB+/Stable)
Rs.177.0 Million Proposed Long-Term Bank
Loan Facility BBB-/Stable (Upgraded from BB+/Stable)
CRISIL has upgraded its rating on the bank facilities of SuryaChambal Power Ltd (SCPL) to ‘BBB-/Stable’ from ‘BB+/Stable’. The upgrade follows the transfer by SCPL of its debt-funded 10-MW greenfield biomass-based power project, to a newly formed special purpose vehicle (SPV) namely Surya BioEnergy Pvt Ltd (Surya BioEnergy); CRISIL had earlier expected SCPL’s financial risk profile to deteriorate on account of this project. CRISIL has not consolidated Surya BioEnergy with SCPL as SCPL has not extended any guarantee towards the debt contracted by Surya BioEnergy and SCPL has not made or expected to make any investment in the same. Further, CRISIL does not expect SCPL to undertake any other project over the next two to three years.
The upgrade also reflects the improvement in SCPL’s net-worth to Rs.216 million as on March 2010 from Rs.121 million as on March 2009, mainly driven by Finanzhaus Burkle & Co’s (FBC; owns 83 per cent stake in SCPL) equity infusion of Rs.28 million in SCPL and its conversion of advances of Rs.56 million given to SCPL into equity in 2009-10
The rating continues to reflect SCPL’s stable revenues under the power purchase agreement (PPA) the company has with Rajasthan Rajya Vidyut Prasaran Nigam Ltd (RRVPN), and SCPL’s moderate financial risk profile and its healthy cash accruals from certified emission reductions (CER) sales. These strengths are partially offset by SCPL’s exposure to risks relating to fluctuations in biomass costs, large working capital requirements and concentration in its revenue profile.
Outlook: Stable
CRISIL expects SCPL to generate stable revenues over the medium term on the back of its PPA that entails assured off-take of power at a fixed tariff. The outlook may be revised to ‘Positive’ in case of a significant and sustained improvement in the company’s financial risk profile, supported by improved accruals and higher operating efficiency. Conversely, the outlook may be revised to ‘Negative’ in case the cash flows get affected because of unplanned outages resulting in low plant loading factor or delays in receivables by RRVPN or there is deterioration in financial risk profile, because of fresh debt-funded capex.
About the Company
SCPL operates a 7.5-MW biomass-based power plant near Kota, Rajasthan; the plant became operational in June 2006. The primary biomass used by the company is mustard husk. FBC a Switzerland-based financial investor holds 83 per cent stake in SCPL, while the remainder is held by MC Bagrodia & Associates.
SCPL reported a profit after tax (PAT) of Rs.10 million on net sales of Rs.193 million for 2009-10, against a PAT of Rs.15 million on net sales of Rs.215 million for 2008-09.
(INR 100 = USD 2.207/EUR 1.633)
Rating agency website: www.crisil.com
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