CRISIL has cut the rating for Lanco Teesta Hydro Power Pvt Ltd to long term loans to “D” from “BB” on delay in paying interest on loans.
The downgrade reflects instances of delay in servicing its interest payments. The delays are fallout of inadequate cash accruals and delays in commissioning of project.
There is also absence of timely support from parent company Lanco Infratech Ltd.
CRISIL, in a statement, said the rating also reflected Lanco Teesta’s exposure to risks related to project implementation, hydrology, single-site concentration and weak counterparty, and the company’s weak financial risk profile.
The rating also factors in the long-term, fixed-price terms of Lanco Teesta’s power purchase agreement (PPA) with Maharashtra State Electricity Distribution Company Ltd.'
