Fitch upgrades credit rating of Lakdhanavi to AA+(lka)/Stable in June 2020.

The revision of Lakdhanavi’s National Long-Term Rating to AA+(lka)/Stable from AA-(lka)/Stable reflects the recalibration of the Sri Lankan national scale ratings to reflect changes in the relative creditworthiness among the country’s issuers following the downgrade of the sovereign rating to ‘B-‘ from ‘B’ on 24 April 2020. The Outlook on Sri Lanka’s Long-Term Issuer Default Rating is Negative. Fitch rates Lakdhanavi Limited based on the consolidated profile of its parent LTLHoldings (Private) Limited (LTLH) due to the strong legal and operational linkages between the two entities, as defined in Fitch’s Parent and Subsidiary Rating Linkage criteria. The rating also reflects LTLH’s leading market position in country’s power sector, stable cash flow generation stemming from fixed long term contracts, strong EBITDA margins offset by the relatively small operating scale its business segments other than O&M and power generation, which are inherently more volatile. Fitch also expects the group to maintain its net leverage
inline with an ‘AA+(lka)’ rating.