Fitch downgrades Kotagala to RD

Fitch Ratings said it downgraded Kotagala Plantations plc's national long-term rating to RD(lka) from CC(lka). Fitch cut the rating on its senior secured debentures to C(lka) from CC(lka) to reflect low recovery prospects amidst significant prior ranking and secured debt.

“The downgrade reflects the company's confirmation that it did not pay the LKR 250 million principal due on May 26, 2020, of its type C secured redeemable debentures, and the absence of a grace period. The company says it will meet the aggregate interest payments of LKR 34 million on type C and type D debentures as scheduled, in line with the terms and conditions of the indenture,” Fitch said in a press release.

Kotagala said it plans to restructure the principal repayment on the type C debentures, as well as the LKR 250 million principal due on its type D secured redeemable debentures which are due May 26, 2021, the agency said.

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