Lakdhanavi Limited’s National Long-Term Rating at ‘AA+(lka)’.
The Outlook is Stable. Fitch rates Lakdhanavi based on the consolidated profile of its parent LTL Holdings (Private) Limited (LTLH) due to the strong legal and operational linkages between the two entities, as defined in our Parent and Subsidiary Linkage Rating Criteria.
The affirmation reflects LTLH’s ability to maintain net leverage, with proportionate consolidation of its subsidiaries, 51%-owned Lakdhanavi Bangla Power Limited (LBPL) and 56%-owned Feni Lanka Limited (Feni), below its negative rating sensitivity of 5.5x in the next few years, despite debt-funded investments.
The rating also reflects LTLH’s leading market position in the operation and maintenance (O&M) segment in the country’s power sector, stable cash flow generation from fixed long-term power generation contracts in Bangladesh, and strong EBITDA margins, which are offset by its high counterparty risk.
Strong Linkages with Parent: We view the operational and legal linkages between Lakdhanavi and its weaker parent, LTLH, to be strong under our Parent and Subsidiary Linkage Rating Criteria. The linkages include LTLH’s strong control over Lakdhanavi’s board, presence of a centralised treasury, unrestricted cash flow fungibility between the two entities and upstream guarantees provided by Lakdhanavi.
0 comments: