Neyveli Lignite given highest credit quality status

ew Delhi, July 10 (UNI) Neyveli Lignite Corporation (NLC) which triggered a political storm here over its disinvestment, has been rated as a company with the highest credit quality reflecting its efficient and cost competitive power generating operations. The rating agency ICRA has retained the LAAA ratings assigned to the Rs 800 crore Non-Convertible Bond (NCB) programme and Rs 2300 crore long term borrowing programme of NLC.

''The rating favourably factors in the dominant Government of India ownership, the relatively superior credit quality of its principal consumers and the benefits that have accrued to NLC from the securitisation of past dues such as allotment of bonds by the respective state Governments'', ICRA said.

The rating indicates highest credit quality reflecting NLC's efficient and cost competitive power generating operations, limited fuel risk arising from its captive lignite mines, and the very favourable financial risk profile arising from the conservative capital structure and comfortable cash generation.

Prime Minister Manmohan Singh had ordered halt to the disinvestment programmes of NLC and Nalco, following a threat from the UPA alliance partner DMK, to move out of the government at the Centre.

NLC, with a 94 per cent ownership by the Central Government is primarily engaged in the activities of lignite mining and power generation.

During 2005-06, NLC achieved sales of Rs 2503 crore and net profit of Rs 702 crore.

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