Fitch reaffirms AA-(Stable Outlook) Credit Rating for Lakdhanavi » lanka Transformers Private limited

Fitch reaffirms AA-(Stable Outlook) Credit Rating for Lakdhanavi

LTL group’s main subsidiary, Lakdhanavi Ltd was reaffirmed credit rating of AA-(Stable Outlook) by Fitch Ratings in December 2019. Lakdhanavi’s credit rating is above or at par with leading banks and Corporates in Sri Lanka. In reaffirming the credit rating Fitch Lanka stated “Fitch Ratings has affirmed the National Long Term Rating of Lakdhanavi Limited at AA-(lka) with a Stable Outlook. Fitch rates Lakdhanavi Limited based on the consolidated profile of its parent LTL Holdings (Private) Limited (LTLH) due to the strong legal and operational linkages between the two entities, as defined in our Parent and Subsidiary Rating Linkage criteria. The affirmation of LTLH’s rating at AA-(lka)/Stable reflects Fitch’s view that the group will maintain its leverage defined as net adjusted debt/EBITDAR, (with proportionate consolidation of its subsidiaries Lakdhanavi Bangla Power Limited (LBPL: 51%) and Feni Lanka Limited (Feni: 56%), below2.0x in the next few years despite significant expansion CAPEX. The rating also reflects its LTLH’s leading market position in country’s power sector, stable cash flow generation stemming from fixed long term contracts, strong EBITDAR margins offset by the relatively small operating scale its business segments other than O&M and power generation, which are inherently more volatile

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