ICRA withdraws rating assigned to borrowing programme of MEP Infrastructure

Rating agency ICRA has withdrawn the rating for MEP Infrastructure Developers' bank limit of Rs 50 crore due to slower than anticipated progress in six under-construction hybrid annuity mode (HAM) road portfolio.

At the same time, the company's non-fund based limits rating has been downgraded to ICRA A4 plus from ICRA A3.

"The slow progress in these projects had resulted in significantly lower than anticipated gross billing for MEP's construction business. The limited experience of the company in engineering, procurement and construction business exposes the projects to execution-related risks," said ICRA.

The rating also factors in elevated levels of equity mobilisation risk for the under-construction HAM portfolio of MEP as 50 per cent of its total equity commitments were to be funded through asset monetisation and there has been no major progress on asset monetisation front vis-a-vis timelines indicated by the management earlier, it added.

MEP's cash and bank balance stood at Rs 69.7 crore as on March 31 of which Rs 62.6 crore is encumbered. The company has debt repayment obligations of Rs 89 crore due in 2019-20.

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