Moody's downgrades Precision Capital

Moody's Investors Service said it downgraded Precision Capital Private Ltd.'s corporate family rating to B3 from B2.

The company also revised the outlook to negative from stable.

The downgrades reflect the company's significant bank loan amortization payments, which will absorb cash on hand and cash from operations over the next six to 12 months, Moody's said.

The company reported leverage measured by its adjusted debt-to-EBITDA ratio of about 4.3x in fiscal year 2017, the agency said.

Although the company has been successful in managing costs to help offset slower revenue growth, EBITDA is expected to remain relatively flat over the next 12 to 24 months, Moody's said.

That means the company's liquidity position will deteriorate quickly as cash costs are estimated to climb to more than $100 million for the year ending June 2018, the agency said.

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