Moody’s revises outlook on Adani Transmission to ‘stable’

PTI Mumbai | Updated on June 14, 2019 Published on June 14, 2019

Global rating firm Moody’s has revised its outlook on Adani Transmission’s (ATL) rating to stable from negative mainly on the back of expected improvement in the company’s financial position over the next 12-18 months.

Moody’s has also affirmed ATL’s Baa3 senior secured bond ratings, it said in a statement here.

“The change in ATL’s outlook to stable reflects the expected improvement in its financial position over the next 12-18 months, underpinned by incremental earnings contributions from the Mumbai integrated utility business acquired last year and recently completed greenfield projects,” Moody’s Vice President and Senior Analyst Spencer Ng said.

Last year, ATL bought the integrated business of generation, transmission and distribution for Mumbai of Anil Ambani’s Reliance Infrastructure for total consideration value for the deal around Rs 18,800 crore.

“The change in outlook also considers the partial equity credit ascribed to subordinated loans from its promoter, after factoring in recent changes made to the terms of these instruments,” Ng added.

Over the next 12-18 months, Moody’s expects the company’s consolidated funds from operations to improve to the mid seven per cent range, which is above -- but would remain close to -- the minimum tolerance level of seven per cent set for the bonds’ Baa3 ratings, after factoring in additional debt to be incurred to help fund capital expenditure.

ATL, based in Ahmedabad, is the largest private-sector participant in India’s power transmission market.

Published on June 14, 2019
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