Brief Rationale September 29, 2014 CARE ASSIGNS 'CARE AAA (SO
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Brief Rationale September 29, 2014 CARE ASSIGNS ‘CARE AAA (SO)’ RATING TO THE PROPOSED NCD/BOND ISSUE OF KONKAN RAILWAY CORPORATION LIMITED Ratings Amount Facilities/Instruments Ratings1 Remarks (Rs. crore) CARE AAA (SO) Proposed NCD/Bond Issue* 500.00 Assigned [Triple A (Structured Obligation)] Total 500.00 * Backed by Letter of Comfort from Ministry of Railways (MoR), Government of India (GoI) Rating Rationale The rating continues to derive strength from the credit enhancement provided by way of Letter of Comfort from the Ministry of Railways (MoR), Government of India (GoI), which undertakes to make funds available for the timely repayment of principal and interest in respect of the bonds issued by Konkan Railway Corporation Ltd (KRCL). Background KRCL was formed in 1990 to construct, operate and transfer a railway track between Roha and Mangalore on the west coast of India over a distance of 760 kms. It is the first Railway Project in the country to be executed on BOT Principle (Build, Operate and Transfer).GoI is the main shareholder of KRCL holding 51% of the total share capital and the balance is shared among State Governments of Maharashtra, Karnataka, Goa and Kerala. The Konkan Railway is a non-electrified broad-gauge (1,676 mm) single line, from Roha to Mangalore (760 km) with 59 stations on the line. It was built at a cost of about USD 755 million in one of the toughest terrain with over 2,000 bridges and 91 tunnels. The corporation also undertakes various construction and consultancy projects related to construction of tunnels, roads, bridges etc for some of the State Governments and various advisory assignments in different railway-related fields. During FY14 (refers to the period April 1 to March 31) on provisional results, KRCL reported a PAT of Rs.13.11 crore on a total operating income of Rs.1258.78 crore. For FY13 (refers to the period April 1 to March 31), KRCL reported a net loss of Rs.235.41 crore on a total income of Rs.1,125.93 crore. However, the loss in FY13 was mainly on account of exceptional item of Rs.172.08 crore which includes provision towards pension liability of earlier years of Rs.139.92 crore and impairment loss of Rs.32.16 crore both of which are non-cash in nature. Analyst Contact Name: Arunava Paul Tel: 022-6754 3667 Email: [email protected] CARE has classified instruments rated by it on the basis of complexity. This classification is available at www.careratings.com. Investors/market intermediaries/regulators or others are welcome to write to [email protected] for any clarifications. Disclaimer: CARE’s ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. CARE has based its ratings on information obtained from sources believed by it to be accurate and reliable. CARE does not, however, guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Most entities whose bank facilities/instruments are rated by CARE have paid a credit rating fee, based on the amount and type of bank facilities/instruments. 1 Complete definition of the ratings assigned are available at www.careratings.com and other CARE publications 1 Credit Analysis & Research Limited Brief Rationale CONTACT Head Office Mumbai Mr. D.R. Dogra Mr. Rajesh Mokashi Managing Director Dy. Managing Director Mobile: +91-98204 16002 Mobile: +91-98204 16001 E-mail: [email protected] E-mail: [email protected] Ms. Meenal Sikchi Mr. Ankur Sachdeva Vice President - Bank Loan & Instrument Rating Vice President - Bank Loan & Financial Services Mobile: +91-9819009839 Mobile: +91-9819698985 E-mail: [email protected] E-mail: [email protected] CREDIT ANALYSIS & RESEARCH LIMITED Corporate Office: 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (East), Mumbai - 400 022 Tel: +91-22-6754 3456 | Fax: +91-22-6754 3457 | E-mail: [email protected] Other Office: 503, Kaledonia, Sahar Road, Near Andheri Railway Station, Andheri (E), Mumbai - 400 069 Tel: +91-22-6144 3456 | Fax: +91-22-6144 3556 AHMEDABAD KOLKATA Mr. Mehul Pandya Ms. Priti Agarwal 32, Titanium, Prahaladnagar Corporate Road, 3rd Floor, Prasad Chambers, (Shagun Mall Bldg.) Satellite, Ahmedabad - 380 015 10A, Shakespeare Sarani, Kolkata - 700 071. Cell: +91-98242 56265 Cell: +91-98319 67110 Tel: +91-79-4026 5656 Tel: +91-33- 4018 1600 E-mail: [email protected] E-mail: [email protected] BENGALURU NEW DELHI Mr. Dinesh Sharma Ms. Swati Agrawal Unit No. 1101-1102, 11th Floor, Prestige Meridian II, 13th Floor, E-1 Block, Videocon Tower, No. 30, M.G. Road, Bangalore - 560 001. Jhandewalan Extension, New Delhi - 110 055. Cell: +91-99000 41975 Cell: +91-98117 45677 Tel: +91-80-4115 0445, 4165 4529 Tel: +91-11-4533 3200 E-mail: [email protected] E-mail: [email protected] CHANDIGARH PUNE Mr. Sajan Goyal Mr. Rahul Patni 2nd Floor, S.C.O. 196-197, Sector 34-A, 9th Floor, Pride Kumar Senate, Chandigarh - 160 022. Plot No. 970, Bhamburda, Senapati Bapat Road, Cell: +91 99888 05650 Shivaji Nagar, Pune - 411 015. Tel: +91-172-5171 100 / 09 Cell: +91-78754 33355 Email: [email protected] Tel: +91-20- 4000 9000 E-mail:[email protected] CHENNAI Mr. V Pradeep Kumar Unit No. O-509/C, Spencer Plaza, 5th Floor, CIN - L67190MH1993PLC071691 No. 769, Anna Salai, Chennai - 600 002. Cell: +91 98407 54521 Tel: +91-44-2849 7812 / 0811 Email: [email protected] HYDERABAD Mr. Saikat Roy 401, Ashoka Scintilla, 3-6-502, Himayat Nagar, Hyderabad - 500 029. Tel: +91-40-4010 2030 E-mail: [email protected] JAIPUR Mr. Rahul Jain 304, Pashupati Akshat Heights, Plot No. D-91, Madho Singh Road, Near Collectorate Circle, Bani Park, Jaipur - 302 016. Cell: +91 – 93149 21496 Tel: +91-141-402 0213 / 14 E-mail: [email protected] 2 Credit Analysis & Research Limited .