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| Loan rating cut for DP World's Indian units |
| BS Reporter / Mumbai Dec 01, 2009, 01:07 IST |
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Dubai World’s troubles have begun to impact India. Icra, the rating agency, today downgraded its ranking on loans extended to DP World’s (a transport and logistics arm of Dubai World) container terminals, at Chennai and Nhava Sheva (Navi Mumbai).
These loans are backed by an unconditional and irrevocable guarantee from DP World. Icra has revised the long-term rating assigned to the term loans of Rs 350 crore of Chennai Container Terminal Pvt Ltd from LAA (SO) to LA (SO). And, revised the short-term ratings from A1+ to A2+ for CCTL’s Rs 52.6 crore short-term, non-fund based limits.
Similarly, the rating to Nhava Sheva International Container Terminal Pvt Ltd’s term loans (Rs 200 crore) has been downgraded from LAA to LA. Also, the rating to the Rs 150 crore short-term, non-fund based limit has been down-graded from A1+ to A1.
Icra has also done the first rating exercise for DP World’s container terminal at Mundra (Gujarat). It has assigned an LA (So) rating to Mundra International Container Terminal Pvt Ltd’s Rs 800-crore long-term borrowing plan and one of A2 to its Rs 60-crore non-fund limits. The rating will be under watch.
The action follows downgrading of the long-term debt and issuer rating of DP World Ltd from A3 to Baa2 by Moody’s, the global rating agency.
The Government of Dubai had said it would restructure Dubai World, together with a requested “standstill” on financing to Dubai World and its subsidiary, Nakheel Properties, apart from extending the maturities until the end of May 2010.
The rating takes account of the fact that the restructuring process announced for Dubai World does not include the debt obligations of DP World. The revision in the standalone rating is due to weakened credit quality of the parent, DP World.
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