India Ratings Revises Rating Watch on Cleansolar Renewable Energy’s Term Loan to Evolving

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India Ratings and Research (Ind-Ra) has revised the rating watch on Cleansolar Renewable Energy Private Limited’s (CREPL) term loans to Rating Watch Evolving (RWE) from Rating Watch Negative (RWN) as follows:

Key Rating Drivers

The RWE follows Mahindra and Mahindra Ltd’s (‘IND AAA’/Stable) announcement that its step-down wholly owned subsidiary Mahindra Renewables Private Limited (‘IND A-’/Stable) has agreed to sell its entire stake aggregating 100% of the paid-up equity share capital in CREPL to CLP India Private Limited (‘IND AAA’/Stable) for INR1,088.5 million. The company expects the sale to be completed by 31 May 2020. Following the sale, CREPL will cease to be the subsidiary of Mahindra Renewables and consequently of Mahindra and Mahindra. 

The RWE reflects the lack of clarity on the impact of above development on the credit quality of CREPL. 

As per the management, the above transaction is subject to conditions precedent including approvals from lender. Ind-Ra will continue to monitor the impact of the sale on CREPL’s senior debt and change in debt features, if any, including sponsor support undertakings. 

Rating Sensitivities

The RWE indicates that the ratings may be affirmed, downgraded or upgraded upon resolution. Ind-Ra is likely to resolve the RWE once there is clarity on debt-related terms and any other impact due to the sale of the assets.

Company Profile

CREPL is a special purpose vehicle promoted by the Mahindra group that was formed to set up and operate a 30MW solar photovoltaic power plant in Tandur, District Rangareddy South, Telangana. The plant commenced commercial operations on 29 June 2016. 

Financial Summary

Rating History

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