Reliance Power on Saturday said rating agency CARE has revised long-term and short-term ratings of its subsidiary Sasan Power on account of significant weakening in the financial risk profile of the parent firm.
The rating agency has also cited continual uncertainty over the compensatory tariff implementation towards change in law during construction and foreign exchange variations as reasons for the revision.
Reliance Power said it "strongly disagrees with the revised ratings assigned by CARE".
"CARE has revised the long-term and short term ratings of Reliance Power's subsidiary Sasan Power Ltd to CARE BB+ (negative outlook) and CARE 4 respectively on account of significant weakening in financial risk profile of the parent company coupled with continual uncertainty over the compensatory tariff implementation towards change in law during construction and foreign exchange variations," the company said in a regulatory filing to exchanges.
Reliance Power said the 3,960 mega watt (MW) Sasan UMPP is operating at 97 per cent PLF (plant loan factor) for year to date in FY 2019-2O 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 & productive equipment and are the largest coal mines by volume handled in the country.
"With its competitive tariff Sasan is placed on the top of Merit Order Dispatch (MOD) stack and has an excellent track record of collections from Procurers Sasan has hedged substantial portion of its foreign currency debt," it added.
Reliance Power said Sasan has always been regular on debt service without taking any support from its parent company since inception of the project.
"The company strongly disagrees with the revised ratings assigned by CARE...The company believes that CARE has not appropriately factored in the above rating strengths, while assigning the revised ratings," Reliance Power said.