Vidullanka PLC is the first power company in Sri Lanka to get a credit rating after RAM Ratings Lanka assigned respective long and short-term ratings of BBB+ and P2 with a stable outlook to the long-term rating this week. In a press release from RAM, the agency stated that Vidullanka’s ratings are supported by its sound project economics and the management’s prudent financial strategy. The press release further stated that the company’s credit profile has been improving consistently over the past three weeks as it has been retiring debts through internally generated funds.
According to RAM, the company’s robust revenue has been supported by rising tariff rates and its expanding power generating capacity. Vidullanka has repaid the bulk of its debts via share issues and has been retiring its debts in the last three years, supported by its strengthening revenue base. RAM added that going forward, the management intends to broaden its revenue base within the renewable energy sector via joint-venture investments. While these are positives over the longer term, Vidullanka’s credit metrics are expected to moderate in the interim until these new ventures come on-stream. (NG)