Fitch lowers Essar to negative

Fitch Ratings said it affirmed Essar Projects Ltd.'s long-term and short-term foreign-currency issuer default ratings at B and revised the outlook on the long-term rating to negative from stable.

Essar Global Ltd. holds a 100% stake in Essar Projects. The agency said the negative outlook reflects Essar Global's high financial leverage and its likely slower-than-expected deleveraging. Essar Projects' ratings are constrained by Essar Global's credit profile because group entities are key clients for Essar Projects and Essar Global has full access to Essar Projects' cash flows.

The affirmation reflects Essar Projects' robust order book and comfortable credit metrics, Fitch said.

The ratings continue to be constrained by the inherent business risk in construction companies wherein cash flows are project driven and can vary significantly, the agency said.

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