Fitch puts Melsta on watch

Fitch Ratings said it placed Melsta Regal Finance Ltd.’s national long-term rating of A+(lka) on Rating Watch negative.

The negative watch follows the negative watch placement on the AAA(lka) rating on its previous ultimate parent company, Distilleries Co. of Sri Lanka plc, Fitch said.

The company is undergoing a restructuring that will result in Melsta becoming the holding company for the group and Distilleries becoming a wholly owned subsidiary of Melsta, the agency said.

Melsta’s rating will continue to be driven by an expectation of institutional support as its intrinsic credit profile is considerably weaker than that indicated by its current rating, Fitch explained.

The negative watch could result in a downgrade of Melsta is Distilleries is downgraded, the agency said.

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