Crisil Scales Down Dcm Debentures To Default Grade
The partially convertible debenture (PCD), non-convertible debenture (NCD) and fixed deposit programmes of DCM Industries have been downgraded as default by Credit Rating Information Services of India (Crisil) yesterday.
The companys PCD of Rs 32.45 crore and NCD of Rs 14.5 crore have been assigned D against the earlier rating of BB-. The revised rating indicates the debentures may default and in arrears of interest or principal payments or are expected to default on maturity.
The fixed deposit has been rated as FD against the earlier rating of FB- which indicates that the issue is either in default or is expected to be in default on maturity.
The rating reflects the adverse impact on the operating margins in the companys main line of business, increased working capital requirements funded through borrowings, high leveraging and weakening coverage ratios, said the Crisil release.
Ashapura Minechem has been awarded A+ rating for the Rs 7-crore non-convertible debenture, which indicates adequate safety regarding timely payment on interest and principal
The NCD amounting to Rs 20 crore of Kopran has been downgraded from AA to AA-, indicating high safety and the Rs 5.38-crore NCD of Network from BB+ to D, indicating default. Networks FD has also been downgraded from FB+ to FD, indicating that the issue is either a default or is expected to default.
The revised rating of Kopran reflects the companys increasing financial risks arising from rising gearing levels, declining interest coverage ratios and prospective pressures on operating margins.
The revised rating to Network reflects the deterioration in the overall risk profile on account of decline in business with cessation of manufacturing operations and large losses over the past two years which have eroded the networth of the company.
The rating reflects concern at the discontinuation of main lines of business and shift to trading operations on a low scale which is likely to constrain future cash flows of the company.