Adani Transmission's obligor group restructuring credit neutral: Fitch
May 19, 2021
Singapore, May 19 : Fitch Ratings has said the restructuring plan by Adani Transmission Ltd (ATL) will be credit neutral and unlikely to lead to any change to the company's ratings.
ATL plans to transfer its US-dollar notes due 2026 and 2036 to its newly incorporated wholly-owned subsidiary Adani Transmission Step-One Ltd (ATSOL).
The US-dollar notes to be transferred to ATSOL will be guaranteed by ATL and hence continue to reflect ATL's credit profile.
"Our approach to rating ATL will remain unchanged as we believe cash fungibility will continue between ATL and the proposed obligor group," said Fitch.
"We expect ATL to retain its strong, open access to the cash flow of the restructured obligor group, post the obligor group's statutory and operating expenses and debt servicing requirements."
ATL is able to access the obligor group's cash for capex purposes through a liquidity reserve account. Deposits into this account are not subject to distribution conditions such as a minimum debt service cover ratio of 1.2x.
The restructured obligor group will comprise two wholly owned subsidiaries, Adani Transmission (India) Ltd and Maharashtra Eastern Grid Power Transmission Company Ltd, which houses four key transmission projects that are part of the current obligor group.
The restructured obligor group will also include ATSOL, which will replace ATL.
