Fitch cuts Omaxe debt to BB-(ind)

Fitch Ratings said it downgraded Omaxe Ltd's national long-term rating and the rating on its Rs.3000 million long-term debt program to to BB-(ind) from A-(ind). The ratings have been placed on Rating Watch negative.

The downgrade reflects the change in the real estate sector's fundamentals and the expectation that real estate developers in India will face a challenging operating environment and financial pressures in 2009, Fitch said.

The fundamentals of the industry have deteriorated due to the volatile external environment, weak economic/consumer sentiment, high interest rates, reduced consumer affordability and rising construction costs, the agency said.

The downgrade also considers an expectation that Omaxe's profitability and operational cash flow generation will be significantly impacted by the challenging industry environment, Fitch added.

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