CARE has revised the ratings assigned to GMR Infrastructure Ltd’s bank facilities of Rs 3,355.22 crore and non-convertible debentures of Rs 867.5 crore downward to BBB- from BBB earlier.
The ratings firm said that the revision in the rating factors in the continuing challenging operating environment for the group’s energy assets in which major share of the group’s capital is employed affecting the cash generation and ultimately the group’s financial risk profile.
“The continuing uncertainty on gas supply has led to idling of certain operating assets (220 MWKakinada plant, 388 MW Vemagiri plant) while delaying commencement of operation of GMR Rajamundry Energy Ltd (GREL) (768 MW),” CARE said.
Meanwhile, lack of adequate evacuation infrastructure and unfavourable offtake arrangement have resulted in the group’s coal based thermal assets namely GMR Kamalanga Energy Ltd (1050 MW) and EMCO Energy Ltd (600 MW) running at non-optimum capacity utilisation. This is despite that these plants had tied up fuel supply and power supply for major part of their capacity. “Overall, cash generation from these energy assets were under pressure ultimately affecting the group’s financial risk profile. The rating revision also factors in past delays in debt servicing in respect of certain institution,” CARE observed.
The ratings continue to be constrained by risks associated with various projects under implementation, it added.
However, CARE noted that these ratings continue to derive strength from the group’s diversified portfolio of assets, established track record in project execution, stable performance by highway and airport subsidiaries during FY15.
