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Bond Market News
Greenko Upgraded to BB- from B+ by S&P
October 5, 2022
Greenko Energy was upgraded to BB- from B+ by S&P upon the improvement in its business position due to its stabilizing operating performance. Greenko’s diversified portfolio is set to lead to better operating performance and cash flows, helped by its “significant resource diversity”. The rating agency said that although Greenko’s venturing into storage solutions is nascent, it is expected to “boost revenue without assuming resource risk”. Greenko’s receivables position is expected to temporarily stabilize over the next 12 months with collection of overdues, with the government’s Late Payment Surcharge scheme likely to provide temporary relief to the company. In particular, the Andhra Pradesh state distribution companies, have started to clear their overdues with monthly payments of about $20mn. Also, Greenko’s increasing exposure to higher credit quality project offtakers like Solar Energy Corp. of India and NTPC will help in timely collection on receivables. This would ultimately reduce working capital problems. However, S&P notes that Greenko’s leverage remains elevated and the company is expected to incur capex of ~$380mn in 2023 and $500mn in fiscal 2024 to construct storage projects.
Greenko’s dollar bonds were trading higher with its 3.85% 2026s up 0.6 points to 81.9, yielding 10.2%.
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