Crisil downgrades Symphony Comfort FDThe `FA+' rating assigned to the fixed deposit programme of Symphony Comfort Systems Limited (Symphony) has been downgraded to `FA-'. The revised rating indicates that the degree of safety regarding timely payment of interest and principal is satisfactory.
The revision in rating takes into account the significant drop in Symphony's air cooler sales in 1996-97 which has led to a substantial drop in income on account of the continuing dependence on cooler sales to large extent, slower off-take of other products, downturn in the consumer durable industry and vulnerability to competition from unorganised sector across the product range. While operating margins have improved, higher interest costs and depreciation charges have put pressure on the profitability and the interest covers have deteriorated. These factors are partly offset by the comfortable gearing brand name built up by Symphony in the cooler segment and improving sales trends in the first quarter of1997-98.
Symphony is engaged in the manufacture of consumer durable under the brand name `Symphony'. Symphony was the first company in the organised sector to enter the air-coolers market and is one of the market leaders in this segment. The company has expanded its product range to include other products like ventilation fans, water heaters, geysers, grinders, washers and air conditioners(Acs).
Crisil downgrades HDCL's Rs 106-crore PCD programme
The rating assigned to the Rs 106.25 crore partly convertible debenture issue of Hindustan Development Corporation Limited (HDC) has been downgraded to `BB-' from `BBB'. The revised rating indicates inadequate degree of safety regarding timely payment of interest and principal on the instrument.
The revised rating reflects alteration in the risk profile of the company on account of the non-stabilisation of its steel division and the impairment in its liquidity position due to the quality of its money market portfolio. This has resulted in some delaysby the company in the payment of its financial obligations.
HDC, promoted by the Calcutta based RP Mody, is a multi-product, multi-locational company engaged in the manufacture of wide range of products viz. railway products/wagons, steel wines, petro carbons, cyanide based chemicals, jute textiles/fabrics and electrical insulators. Lately, HDC had taken up a project for the production of alloy steel. In 1996-97, the company recorded a turnover of Rs 581.33 crore in 1996-97 of which the railway products/wagons, steel wires and jute textiles/fabrics together accounted for around 60 per cent.
Crisil downgrades Premier Housing FD
The fixed deposit programme of Premier Housing and Industrial Enterprises Limited (Premier) has been downgraded from `FA' to `FB+'. The revised rating indicates that the degree of safety regarding the timely payment of interest and principal is inadequate.
The revised rating mainly reflects the strained liquidity position arising out of increased working capitalrequirements and the delay in attaining adequate bank finance. Premier is a south based construction company involved in the development of both residential and commercial property. The company has constructed close to 13 lakh square feet thus far and had an income of Rs 29 crore for the year ended March 1997. The track record of the company and the support of the Maica group of Malaysia have been favourably factored into the rating.
ICRA assigns `LAA' rating to Nicco Uco NCD
ICRA has assigned an `LAA' rating to the NCD programme of Nicco Uco Financial Services Limited, indicating high safety. ICRA has also revised the rating of the FD programme to `MAA', indicating high safety and retained the rating of its CP programme at `A1+', indicating highest safety.
The ratings reflect NUFSL's conservative business practices, prudent accounting policies that have led to build up of reserves, excellent tenure matching of assets and liabilities and deployment of large quantum of funds in ICDs and bills withgood asset quality, which can be liquidated in case of contingencies. The rating of the FD programme has however, been revised downwards in views of fall in profitability and build up of NPAs. The management has launched a concerted recovery drive, the outcome of which would have a bearing on the future profitability of the company.
ICRA assigns `LAA(SO) to IRFC's Rs 300-crore bond
ICRA has assigned `LAA(SO)' rating to the Rs 300 crore 12th `B' series tax free bond issue of Indian Railway Finance Corporation Limited (IRFC). The rating indicates highest safety.
IRFC provides funding by way of lease financing the rolling stock viz. diesel and electric locomotives, carriages and wagons to Indian Railways. Funding has been through mobilising bonds in the domestic market, raising funds in international market and deploying part of internal accruals. Terms of lease are defined in the lease agreements which have been formalised between IRFC (lessor) and the President of India through ED Railway stores(lessee) for all leases done till March 31, 1997.
There is maturity mismatch as the tenure of its bonds is shorter than the lease period. The lease agreement covers IRFC for this shortfall at the time of redemption of bonds. As per the agreement, the shortfall would be made good through bullet payment of lease rentals in advance by the lessee. The rating also takes into account the Letter of Comfort issued by MoR to cover the shortfall in redemption of principal and interest obligations of the rated bonds issue.
ICRA downgrades Pennar Aluminium NCD
ICRA has downgraded the rating assigned to the NCD programme of Pennar Aluminium Company Limited (PALCO) to `LD' indicating default, from `LBB'. The revised rating indicates that the company is ether already in default in payment of interest and/or principal as per terms or expected to default. Recovery is likely only on liquidation or reorganisation.
PALCO is a Hyderabad-based company that manufactures aluminium strips and conductors. The company'sperformance was affected due to sluggish demand and sharp reduction in import duties resulting in severe competition from imports. The downgrade reflects the weakened financial position of the company.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
