Add to balance / Manage account | User: | Log out |
Prospect News home > News index > List of issuers I > Headlines for ISMT Ltd. > News item |
Fitch cuts ISMT view to negative
Fitch Ratings said it revised ISMT Ltd.'s outlook to negative from stable. Its national long-term rating was affirmed at A(ind), along its long-term loans of Rs. 7.50 billion, revised from Rs. 6 billion, at A(ind), fund-based working capital limits of Rs. 4 billion, revised from Rs. 3.05 billion, at A (ind)/F1(ind) and non-fund based limits of Rs. 5.95 billion, revised from Rs. 4.10 billion, at A(ind)/F1 (ind).
The negative outlook reflects pressure on margins stemming from increased overhead costs which, coupled with the additional capital expenditure for its proposed Rs. 1.9 billion power plant, is expected to increase financial leverage beyond anticipated levels, Fitch said.
The agency noted that the captive power plant will significantly improve the business profile of ISMT and provide estimated annual savings of Rs. 400 million from 2012.
But the company remains exposed to execution risks in the interim and any delays in implementation and/or higher financial leverage beyond 5.0x on a sustained basis could act as a negative rating trigger, the agency said.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.