Sri Lankan hydro power producer rated ‘BBB+’

Dec 22, 2009 (LBO) – Private power producer Vidullanka PLC has been given a short term financial rating of P2 and a long term rating of BBB+, by agency RAM Ratings Lanka. The long term rating has a stable outlook.

The rating is supported by the company’s sound project economics and financial strategy, the rating agency said.

It was also helped by the improving credit profile of the company over the past three years due to a strategy of retiring debts through internally generated funds.

As a result of this, gearing levels have been eased to 25 percent of company capital as at end September 2009. Debt service coverage ratio stands at 7.09 times.

“Going forward, the management intends to broaden its revenue base within the renewable-energy sector via joint-venture investments,” RAM Ratings said.

“While these are positives over the longer term, Vidullanka’s credit metrics are expected to moderate in the interim, until these new ventures come on-stream.”

Vidullanka is an independent power producer, listed on the Colombo Stock Exchange. It is in renewable energy generation, while its subsidiary Vidul Construction specialises in building