Ratings agency Standard & Poor's today revised outlook on Ballarpur Industries Ltd (BILT) and its core subsidiary Bilt Paper B.V. To positive from stable on the back of company's exit from Malaysian unit Sabah Forest Industries.
S&P said it had affirmed 'B' long-term corporate credit ratings on BILT and its subsidiary but withdrew all the ratings at the company's request.
"The outlook revision followed BILT's announcement on Sepember 24, 2015, that it plans to sell its entire stake in its Malaysian unit Sabah Forest Industries for an enterprise valuation of USD 500 million," S&P said in a statement.
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The positive outlook at the time of withdrawal reflected view that BILT will use the majority of the proceeds from the sale to repay its debt, leading to a material improvement in its leverage, it added.
At the time of the withdrawal, the ratings affirmation reflected BILT's continued stable operating performance and ability to manage its debt maturities.
"We expect the company to maintain an EBITDA margin of 17-18 per cent and manage its banking relationships to roll over its debt maturities," it said.
The ratings agency further said it could have revised the outlook to stable if BILT faced roadblocks in completing the asset sale; used a significant portion of the sale proceeds for shareholder distribution, such that the expected improvement in leverage seemed unlikely over the next 12 months or its liquidity or operating performance was weaker than expected.
