*Downgrade cloud on Tata Power* * *
· *Ratings agency Moody’s has placed Tata Power Company's (TPC’s) Ba3 corporate family rating on review for a possible downgrade due to material covenant breaches on bank debt associated with the Ultra Mega Power Project at Mundra in Gujarat.*** · *However, the covenant breaches do not constitute a payment default, went a Moody’s Investor Services statement. The breaches are related to TPC not meeting its agreed maximum debt to equity ratio and minimum debt service coverage ratios.*** · Coastal Gujarat Pvt Ltd, subsidiary of Tata Power, is implementing the 4,000 Mw project at Mundra in the Kutch region, based on imported coal. The project value is around Rs 18,000 crore (in excess of $3 billion) or 30 per cent of TPC’s total assets reported in 2011-12. Financial challenges at the project have created considerable strain for TPC, as evidenced by the covenant breaches. · Moody’s also put the B1 senior unsecured bond rating and Senior Unsecured MTN Program (foreign currency) rating of (P)B1 under review for a downgrade. *The review action reflects questions relating to the project’s long-term impact on TPC’s financial profile, given the cost and rate structures.* On Fri, May 25, 2012 at 5:07 PM, RAJESH DESAI <[email protected]> wrote: > PFA > > > On Thu, May 24, 2012 at 5:47 PM, Siddanth Gupta > <[email protected]>wrote: > >> True, >> >> When one can not LEAVE has to LIVE with >> >> regards >> >> On May 24, 5:14 pm, Priyanka Joshi <[email protected]> >> wrote: >> > At this price one cannot sell Tata Power. >> > >> > On Thu, May 24, 2012 at 5:40 PM, Anish Poojara <[email protected] >> >wrote: >> > >> > >> > >> > >> > >> > >> > >> > >> > >> > > Thanks. But I guess I will have to be patient for 2-3 years more for >> this >> > > problem to fully settle down and Mundra to start contributing to NP. >> > > anish poojara >> > >> > > On Thu, May 24, 2012 at 5:08 PM, RAJESH DESAI <[email protected] >> >wrote: >> > >> > >> The co. is planning to merge its Indonesian coal mining co with the >> one >> > >> owning the Mundra project. This will offset the losses. Govt. will >> have >> > >> increase the tarrifs & as & when this is done the impairment losses >> can be >> > >> reversed. >> > >> > >> On Thu, May 24, 2012 at 4:25 PM, Anish Poojara < >> [email protected]>wrote: >> > >> > >>> Will such impairment costs repeat every year? >> > >>> Is Mundra a write off? >> > >>> anish poojara >> > >> > >>> On Wed, May 23, 2012 at 5:27 PM, Mihir Desai < >> [email protected]>wrote: >> > >> > >>>> Tata Power Company reported consolidated net loss of Rs 1087.68 >> crore >> > >>>> in the year ended March 2012 (FY 2012), compared with net profit >> of Rs >> > >>>> 2059.60 crore in the year ended March 2011 (FY 2011). The reason >> for the >> > >>>> reverse turnaround in FY 2012 was because the company made >> provisions for >> > >>>> Mundra project impairment and deferred stripping costs. The >> company made >> > >>>> provision of Rs 1800 crore for impairment for Mundra project and >> Rs 659.44 >> > >>>> crore on account of deferred stripping costs. >> > >> > >>>> Based on assessment of fuel, forex and other operating costs on >> cash >> > >>>> flows for the Mundra project, a total provision of Rs 1800 crore >> was made >> > >>>> in FY 2012 as impairment loss for the year, Tata Power said. Given >> the >> > >>>> volatility of coal prices and forex, the assumptions will be >> monitored on a >> > >>>> periodic basis and necessary adjustments will be made if external >> > >>>> conditions relating to the assumptions indicate that such >> adjustments are >> > >>>> appropriate, Tata Power said. >> > >> > >>>> The company's consolidated revenue jumped 34% to Rs 25868.87 crore >> in >> > >>>> FY 2012 over FY 2011. The company said the surge in revenue >> reflected >> > >>>> strong operational performance and higher coal price realizations. >> > >> > >>>> The company reported consolidated net loss of Rs 628.75 crore in Q4 >> > >>>> March 2012, compared with net profit of Rs 625.02 crore in Q4 >> March 2011. >> > >>>> The reason for reverse turnaround in Q4 March 2012 was because of >> > >>>> additional provision made for impairment of Rs 815 crore for Mundra >> > >>>> project, Tata Power said. The impairment is mainly on account of >> forex >> > >>>> losses incurred due to rupee depreciation, Tata Power said. >> Consolidated >> > >>>> revenue jumped 44% to Rs 7169.85 crore in the Q4 March 2012 over >> Q4 March >> > >>>> 2011. >> > >> > >>>> Mr. Anil Sardana, Managing Director, Tata Power, said, "During the >> > >>>> financial year, all our businesses have registered robust >> performance. The >> > >>>> company crossed a historic milestone of 5000 megawatt (MW) of power >> > >>>> generation capacity, reaffirming its position as the largest >> integrated >> > >>>> power company in India. During this period, we commissioned >> several large >> > >>>> projects -- Unit 1 of India's first UMPP in Mundra, Unit 1 of 1050 >> MW >> > >>>> Maithon Power Project and 25 MW solar plant at Mithapur. Tata >> Power's >> > >>>> global footprint has been further augmented through its JV with >> Exxaro to >> > >>>> explore electricity generation opportunities across South Africa, >> Botswana >> > >>>> and Namibia. We are also pleased to share that Cennergi has been >> announced >> > >>>> as preferred bidder for two wind projects of 234 MW -- Amakhala >> 139 MW and >> > >>>> Tsitsikamma 95 MW projects. We look forward to early resolution on >> imported >> > >>>> coal compensation issue for long-term sustenance of power sector. >> The >> > >>>> annual consolidated results reflect non-cash impairment provision >> for >> > >>>> Mundra project and deferred stripping costs. We believe it is >> prudent to >> > >>>> make such provisions." >> > >> > >>>> -- >> > >>>> CA Mihir Desai >> > >> > >> -- >> > >> CA. Rajesh Desai >> > >> > -- >> > With Regards, >> > >> > Priyanka Joshi >> > > > > -- > CA. Rajesh Desai > > -- CA. Rajesh Desai -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
