ICRA lowers Sasan Power rating citing deteriorating risk profile; company disagrees

Reliance Power Tuesday said ICRA has revised ratings of its wholly-owned subsidiary Sasan Power Ltd citing deterioration in financial risk profile of the group.

The company, however, strongly disagreed with the ratings assigned by ICRA and said the rating agency "has not appropriately factored in" the strengths of the company while assigning the revised ratings.

"ICRA has revised the long-term and short-term ratings of Sasan Power Ltd to SS+ (negative outlook) and 'A4' respectively, attributing inter-alia to deterioration in financial risk profile of Reliance Power Group and the uncertainty regarding regulatory approval of tariff matters relating to change in law during construction and forex (foreign exchange) variation," Reliance Power said in a BSE filing.

The subsidiary has hedged substantial portion of its foreign currency debt.

"Sasan has always been regular on debt service without taking any support from its parent company since inception of the project. Further, Sasan has already received positive order from APTEL (Appellate Tribunal For Electricity) for tariff matters relating to change in law during construction," Reliance Power said.

It said the 3,960-megawatt (MW) Sasan UMPP is operating at 97 per cent plant load factor (PLF) for year-to-date in 2019-20 and continues to be the best-performing power plant among such large-sized power stations in the country.

The power plant performance is strongly supported by optimal and efficient operating performance of its captive coal mines, which deploy most modern and productive equipment and are the largest coal mines by volume handled in the country, it said.

"The company believes that ICRA has not appropriately factored in the above rating strengths while assigning the revised ratings," Reliance Power added.