Credit Analysis & Research (CARE) has downgraded the long-term bank facilities rating of GVK Power & Infrastructure from 'A-' to 'BBB+' aggregating to Rs 4.25 billion.
CARE has also downgraded the long/ short-term bank facilities rating from 'A-/ A2' to 'BBB+/ A3+' aggregating to Rs 1.20 billion (reduced from Rs 2 billion) of the company.
The revision in the ratings of GVK Power and Infrastructure (GVKPIL) takes into consideration deterioration in financial performance of the company during FY13 (FY refers to the period April 1 to March 31) and H1FY14, decline in operating performance of gas based power plants of the group, deterioration in capital structure of the company and delay in execution of projects under implementation in the hydro and thermal energy segments.
The ratings continue to derive strength from the experience of the promoters and management team, track record of successful execution of projects, well-diversified portfolio of assets under operation and development and long term growth prospects for the infrastructure sector.
The ratings, however, continue to be constrained by high investment commitments of subsidiaries and step down subsidiaries, inherent risk associated with development of greenfield infrastructure projects and exposure to the subsidiaries and other group companies in the form of corporate guarantees.
The ability of the company to raise funds in a timely manner, improve capital structure and meet equity commitments of group companies, as per the schedule without any further deterioration in the financial risk profile are the key rating sensitivities.
Shares of the company declined Rs 0.03, or 0.36%, to settle at Rs 8.25. The total volume of shares traded was 1,096,235 at the BSE (Friday).
No comments:
Post a Comment