Fitch rates Malana Power loan A-(ind)

Fitch Ratings said it affirmed Malana Power Co. Ltd.'s national long-term rating at A-(ind), along with its Rs.986.7 million long-term bank loans at A-(ind) and Rs.250 million secured non-convertible debenture program at AAA(ind). The F1 rating on its Rs.500 million short-term loan has been withdrawn as the loan has been repaid in full. The agency said it assigned an A-(ind) rating to its Rs.2.6 billion long-term bank loan.

The outlook was revised to negative from stable.

The ratings continue to factor in the healthy operating performance of its 8-year-old 86 megawatt merchant power plant and its solid earnings backed by strong tariffs for peak load merchant power, Fitch said.

rating concerns include the increase in support extended by the company to its 88%-owned subsidiary, AD Hydro Power Ltd., which is experiencing a third cost overrun of Rs.1.76 billion with the construction of a 192 megawatt hydro project, the agency said.

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