GMR Group’s Warora Thermal power project in Maharashtra appears to be on the verge of defaulting on its long-term loans of over Rs 3,000 crore due to deterioration in liquidity. Delays in the realisation of payments from those drawing power, especially distribution entities, have affected the financial profile of the power unit.
CARE Ratings, too, has downgraded the rating for term loans of GMR Warora Energy (GWEL) from “BB+” to default grade “D”. The revision in rating factors in the deterioration in the liquidity profile of GWEL.
The ratings continue to remain constrained by the under-recovery of capacity charges for which power purchase agreements (PPAs) are in place. The company has signed PPAs with Maharashtra State Electricity Distribution Company Limited (MSEDCL) and Tamil Nadu Generation and Distribution Corporation (TANGEDCO).
