CRISIL reaffirms rating on Reliance Gas Transport’s bank facilities
CRISIL has reaffirmed its AAA/Stable rating on Reliance Gas Transportation Infrastructure Ltd’s Rs.85 billion term loan and Rs.4.8 billion long-term loan.
By ET Online |
MUMBAI: CRISIL has reaffirmed its AAA/Stable rating on Reliance Gas Transportation Infrastructure Ltd���s Rs.85 billion term loan and Rs.4.8 billion long-term loan. At the same time, it has rated the Letter of Credit of $212.7 million, enhanced from $172.7 million, AAA/Stable.
CRISIL���s ratings on the bank facilities of Reliance Gas Transportation Infrastructure Ltd continue to reflect the strategic importance of RGTIL to Reliance Industries Ltd because of the strong operational linkages between the two companies.
RGTIL���s infrastructure is critical for RIL to evacuate the natural gas produced at its fields in the Krishna-Godavari (KG) basin. The off-take agreement between RGTIL and RIL ensures high utilisation levels of RGTIL���s pipeline; the expected payments under the agreement will be adequate to cover RGTIL���s operational and debt servicing expenditures. The pipeline is likely to be primarily used by RIL. The nature of RGTIL���s operations will ensure that the cash flows are stable and predictable.
These strengths are partially offset by the risks faced by RGTIL due to the uncertainties over gas transportation pricing, and the actual quantity of natural gas produced by RIL. The pricing will be decided by the regulator for the sector.
Outlook: Stable
CRISIL expects the project to achieve commercialisation in the next few months, as envisioned. Further, the expected strong operating cash flows will ensure that RGTIL is able to service its debt obligations. The outlook could be revised to ���Negative��� if the gas transportation pricing is below the levels expected by CRISIL.
CRISIL���s ratings on the bank facilities of Reliance Gas Transportation Infrastructure Ltd continue to reflect the strategic importance of RGTIL to Reliance Industries Ltd because of the strong operational linkages between the two companies.
RGTIL���s infrastructure is critical for RIL to evacuate the natural gas produced at its fields in the Krishna-Godavari (KG) basin. The off-take agreement between RGTIL and RIL ensures high utilisation levels of RGTIL���s pipeline; the expected payments under the agreement will be adequate to cover RGTIL���s operational and debt servicing expenditures. The pipeline is likely to be primarily used by RIL. The nature of RGTIL���s operations will ensure that the cash flows are stable and predictable.
These strengths are partially offset by the risks faced by RGTIL due to the uncertainties over gas transportation pricing, and the actual quantity of natural gas produced by RIL. The pricing will be decided by the regulator for the sector.
Outlook: Stable
CRISIL expects the project to achieve commercialisation in the next few months, as envisioned. Further, the expected strong operating cash flows will ensure that RGTIL is able to service its debt obligations. The outlook could be revised to ���Negative��� if the gas transportation pricing is below the levels expected by CRISIL.
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