Mumbai: Standard & Poor's (S&P) ratings services affirmed
its BB- long-term corporate credit rating on Tata Power and its BB-
issue rating on the company's senior unsecured notes. At the same time it revised
its outlook on Tata Power to negative from stable.
S&P may lower the rating on Tata Power if:
S&P could revise the outlook to stable if Tata Power:
To provide protection to CGPL and support its cash flows, Tata Power has already proposed to transfer at least 75 percent of its equity interest in the Indonesian coal mines and also continues to evaluate other alternative options. The company has been in advanced discussions with the lenders to finalise structure for transferring coal SPV dividends and the process is expected to take 3-6 months. CGPL has also made a request to the lenders for certain waivers including those pertaining to financial covenants and the same is under consideration.
Commenting on this, S Ramakrishnan, executive director, finance, Tata Power, said, “To support CGPL’s cash flows, the company has been in advanced discussions with the lenders to finalise structure for transferring coal SPV dividends. The matter is under consideration by the lenders for approving waivers in certain cases. Given the technical nature of the covenant breaches comprising mainly non-cash entries like impairment and forex costs, we believe our request should get favourable consideration. Further, the covenant breaches do not constitute a payment default.”