CARE Ratings Nepal assigns BB- and A4 to long term and short-term bank facilities of Annapurna Cable Car; Details of facilities included

CARE Ratings Nepal Limited (CRNL) has assigned rating of „CARE-NP BB-‟ to the long-term bank facilities and „CARE-NP A4‟ to the short-term bank facilities of Annapurna Cable Car Private Limited

(ACCPL). CRNL has placed the assigned ratings under „credit watch‟ with developing implications, following the on-going legal case against the company with regard to the installation of the wire for the ropeway project and would take a view on the rating once the implications of the said developments on the overall credit profile of the company is clear.

Key Rating Weaknesses

1. Project implementation & stabilization risk
2. Legal hurdle in the project
3. Significant Cost Overrun
4. Exposure to volatile interest rate
5. Seasonality of revenues

Key Rating Strengths

1. Financial closure achieved for the full project cost
2. Technical assistance from reputed contractors
3. Experienced Promoter
4. Strategic location of the project
5. Increasing trend of tourists in Nepal
6. Government initiative and support for tourism

About the Company

Annapurna Cable Car Private Limited is a Private Limited company, incorporated on March 10, 2010. It is promoted by institutional promoters and individual promoters from different background for setting up Cable Car Project at Sarangkot, Kaski, Nepal. The Project plans to run a ropeway from the bottom station at Seti Bagar, near Fewa Lake to Sarangkot of Pokhara. The project includes about 2.3 km cable car journey, having 18 Gondolas (cable cars) to transport passengers to and from the site. 

Details of the Facilities rated