Business Standard

Icra downgrades GMR Infrastructure's short-term loans

Related News

Rating agency has downgraded its rating for Ltd’s short-term loans to “A3” from “A2+” on growing regulatory and political risks impacting its airports and energy assets.

The rating revision also takes into account the funding risks arising from group’s considerable equity and debt servicing commitments. 

It also cut rating for term loans and non-fund facility to “BBB” from “BBB+”. The outlook on long-term rating has been revised to negative from stable.

Icra in a statement said GMR has low cash balances. The cash generation from operating assets and assets which will be commissioned in near term is expected to be inadequate.

The company is expected to largely depend on debt to meet its equity and debt-servicing commitments. Such dependence on leveraging would result in heightened financial and refinancing risks, Icra added.

The group has capex plans aggregating Rs 32,000 crore over the next two-three years, necessitating incremental equity investments of approximately Rs 3,600 crore.

The group also has substantial debt servicing commitments to the extent of Rs 5,516 crore over the next three years (debt raised to fund equity commitments and which is therefore not backed by project cash flows).

While GMR Infra has sufficient cash/liquid investments (Rs 2,700 crore) to meet immediate equity/debt servicing requirements, substantial additional funds would need to be tied up.

The group has divestment plans across several sectors. But, putting such plans into action is expected to be challenging given the scale of funds planned to be so raised and the continued weak market conditions.

Read more on:   
|

Read More

RBI to infuse Rs 8,000 cr through OMO on Jan 4

"Consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions, the Reserve Bank ...

Quick Links

More news from Finance Rss icon

E-cashless mode will gain traction in 2015: ICICI Lombard

Treatment costs were higher due to use of tertiary hospitals that increased from 43% to 49% in case of retail customers

'Rs 60k-cr investments needed for more insurance penetration'

IRDA's Vijayan said the investment calculations have been based on factors like GDP growth, inflation figures, rupee stability and production ...

SBI approves OTS for mining-affected borrowers in Goa

The bank has proposed 30% waiver on principle loan amount to the truck owners and 40% to the barge owners

Back to Top