Crisil downgrades PCDs of Hindustan Development
Our Banking Bureau
Mumbai, Jan 23: The Credit Rating Information Services of India Ltd (Crisil) has downgraded the Rs 106-crore partly convertible debenture issue from the SP Mody group company, Hindustan Development Corporation Ltd. The PCD programme has been downgraded from BBB to BB-, indicating 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 delays by the company in the payment of its financial obligations," a Crisil press release stated. Crisil has also downgraded the fixed deposit programme of south-based Premier Housing and Industrial Enterprises Ltd from FA to FB+. The revised rating indicates inadequate safety regarding timely repayment.Hindustan Development is a multi-product, multi-locational company engaged in
the manufacture of a wide range of products such as railway wagons, steel wires, petro carbons, cyanide-based chemicals, jute textiles and electrical insulators. The company has also recently taken up a project for the production of alloy steel. In 1996-97, the company recorded a turnover of Rs 581.3 crore, of which railway wagon, steel wires and jute textiles accounted for around 60 per cent.Premier Housing's rating has been downgraded because of the strained liquidity position arising out of increased working capital requirements and the delay in attaining adequate bank finance. The company had made an income of Rs 2.9 crore in 1996-97 and has the support of Maica group of Malaysia. Crisil has given the highest rating of P1+ to the enhanced commercial paper programme of EID Parry Ltd. The programme size has been enhanced from Rs 60 crore to Rs 75 crore.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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