(The following statement was released by the rating agency)
July 25 - Fitch Ratings has assigned India-based Sova Power Limited (SOPL) a National Long-Term Rating of 'Fitch D(ind)'. A list of additional rating actions is provided at the end of this commentary.
The ratings reflect SOPL's tight liquidity position as illustrated by the occasional over-utilisation of its fund-based limits in the last four months ended June 2012. This is a result of a stretched cash conversion cycle of above 200 days in FY12 (year end March).
Fitch also notes SOPL's delays in the servicing of the term loan availed from West Bengal Industrial Development Corporation Limited for the last two quarters ended June 2012. This loan is not rated by the agency.
Positive: Future developments that may, individually or collectively, lead to positive rating action include regularisation of cash credit account and timely debt servicing for the next two quarters.
SOPL is a Kolkata-based manufacturer of solar photovoltaic (PV) modules. The company has a 12.5 megawatts per annum installed capacity of solar PV modules in Durgapur (West Bengal). The company is also involved in the engineering, procurement and construction of solar power plants mainly for state government entities.
Fitch has also assigned ratings to SOPL's bank facilities as follows:
- INR115m fund-based limits: National Long-Term 'Fitch D(ind)'
- INR100m non-fund-based limits: National Short-Term 'Fitch D(ind)'