S&P raises Future Retail

S&P said it upgraded Future Retail Ltd.’s issuer rating to CCC- from SD and affirmed the CCC- rating on its secured notes.

A recent restructuring of onshore debt delayed some immediately large debt payments.

“Future Retail's debt servicing ability in the longer term remains uncertain, in our view. The company's operating cash flows may not be sufficient to meet debt repayments when they resume in December 2021. Its business outlook remains uncertain in the next few months, given India's escalating second wave of Covid-19 infections,” the agency said in a press release.

If the company completes an asset sale to RRVL, it could help the rating of Future Retail’s dollar-denominated notes. The notes would be transferred to the buyer. “The issue rating on the notes will then be driven by the credit profile of the acquiring entity within RRVL and our assessment of that entity's strategic importance to Reliance Industries Ltd. (BBB+/stable/--), the ultimate parent of the group,” S&P said.

The outlook is developing.

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