MUMBAI, MAY 5: Crisil, a leading rating agency, has downgraded the non-convertible debenture programme of Shri Ishar Alloy Steels Limited from `BB+' to `D' indicating inadequate safety regarding repayment of principal and interest. The new rating also indicates that the company is in default or likely to default in near future.The downward revision of rating was due to a severe deterioration in the credit quality due to problems in production and fall in margins with a detrimental impact on the company's financials.
``The company has been badly hit by power cuts and increasing power tariffs like other alloy steel manufacturers which has eroded its operating margins,'' it said.
Meanwhile, ICRA, another rating agency, has downgraded the long-term rating assigned to the Rs 18.36 crore partially convertible debenture programme and the Rs 10 crore non-convertible debenture programme of Surya Roshni Ltd to `LA+' from `LAA'.
The agency expects the debt servicing capacity to be under pressure in futurebecause of sizeable repayment commitments. The rating was downgraded due to decline in the profitability and debt servicing capacity of the company. The operating margins of the company had declined during 1996-97 due to higher selling expenses.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
