Icra reaffirms USL rating on 6,175 cr debt

Rating agency Icra has reaffirmed its credit ratings on liquor major United Spitirits Ltd's Rs 6,175 crore debt.

The agency has reaffirmed AA+ rating with stable outlook for Rs 3,925 crore on long term/short term fund. It also reaffirmed "A1+" rating on Rs 1,500 crore commercial paper and AA+ for NCD worth Rs 750 crore.

USL, which is controlled by Diageo, has raised this amount through various debt instruments, including non-convertible debentures (NCDs).

"The ratings continue to factor in USL's strong market position in the domestic spirits industry supported by its large distribution network, wide portfolio and presence across price points, flavours and segments.

"USL continues to benefit from the business synergies through implementation of Diageo's global best practices across business functions which has complemented its large scale of operations," Icra said in a statement.

USL's ratings could be upgraded if the "company's healthy financial performance translates to TD/OPBDITA of less than 0.5x on a sustained basis, it added.

However, it also added that rating could face negative pressure, if "there is any deterioration in margins and, debt funded capex, acquisitions or regulatory measures lead to weakening of the company's credit profile," it added.

USL has an operating income of Rs 9,340.8 crore for FY2019.