Financial Daily from THE HINDU group of publications
Saturday, Dec 27, 2003
Financial Daily from THE HINDU group of publications Saturday, Dec 27, 2003 |
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Corporate
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Corporate Bonds BRPL's debt programme gets ICRA's highest safety rating Our Bureau
New Delhi , Dec. 26 ICRA has assigned an`A1+' (A one plus) rating to the Rs 100-crore commercial paper/short-term debt programme of Bongaigaon Refinery & Petrochemicals Ltd (BRPL). The rating, indicating the highest safety in the short-term for the debt programme that has been enhanced from Rs 50 crore, continues to reflect the improvement in profitability and liquidity position of BRPL since 2002-03. It also shows the stable outlook on refining margins, conservative capitalisation and the support available by virtue of the dominant shareholding of the Indian Oil Corporation. BRPL has also entered into an agreement with Reliance Industries Ltd to restart the polyester staple fibre unit. This is expected to have a positive impact on the oil company's performance. In a statement here, ICRA has noted that BRPL is constrained by the small size of its refining operations, surplus position of petroleum products in the North East and the problems in the availability of crude. This apart, for BRPL to sustain the current profitability and cash accruals, continuance of the fiscal concessions available to refineries in the Northeastern region will be critical, the rating agency has said. BHEL ratings reaffirmed: Meanwhile ICRA has reaffirmed its highest safety ratings of `LAAA', `MAAA' and `A1+' assigned to Bharat Heavy Electricals Ltd's (BHEL) Rs 1,000-crore long-term debt programme, fixed deposit programme and the Rs 500-crore short-term debt programme, respectively. The reaffirmation of the highest safety ratings, ICRA said, takes into account the public sector power major's dominant position in the power engineering industry, its healthy order book position and profitable operations. Strong cash accruals and the low gearing level have resulted in healthy coverage indicators. The rating agency has noted that although the significant amount of receivables remains an area of concern, the efforts made by the company have resulted in a substantial reduction in receivables in 2002-03. Besides, BHEL's current order book position is sufficient to sustain its revenues in the short to medium term, whereas in the medium to long term, the steady capacity addition in the power sector coupled with BHEL's continued cost competitiveness is expected to result in healthy revenues and profits.
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