Fitch cuts Indotech Transformers

Fitch Ratings said it downgraded Indotech Transformers Ltd.'s national long-term rating to A-(ind) from A(ind), along with its Rs. 200 million long-term loans to A-(ind) from A(ind), Rs. 110 million fund-based cash credit limits to A-(ind) from A(ind) with an F1(ind) rating assigned; and Rs. 1.07 billion non-fund based limits to A-(ind) from A(ind) with its F1(ind) rating affirmed.

The outlook remains stable.

The downgrades reflect the transition phase that the company is going through post acquisition by Prolec-GE in May 2009 and its 2010 operating losses, Fitch said.

The downgrade is limited to one-notch due to the strength of its new promoters and their expressed commitment to the company and the Indian market, the agency said.

Prior to acquisition, Indotech's revenues were predominantly from South India, with 70% revenues coming from state electricity boards, Fitch said.

Now, the company is going pan-India, the agency said, and increasing its exposure to private players and engineering, procurement and construction contractors.

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