ICRA puts GACL

ICRA puts GACL
ENS ECONOMIC BUREAU

MUMBAI, MAR 15: Leading rating agency Investment Information and Credit Rating Agency (ICRA) has placed the highest safety `MAAA' rating assigned to the Rs 50-crore non-convertible debenture programme of Gujarat Ambuja Cements Ltd (GACL) on a rating watch with `developing implications' following its move to acquire equity stake in Associated Cement Companies and DLF Cements.

"This rating action has been taken following GACL's acquisition of equity stake in DLF Cements Ltd and ACC and the postponement of a proposed GDR offering, for funding these acquisitions," an ICRA release issued in Mumbai on Wednesday said. Besides, financial institutions have asked GACL to make an open offer to other ACC shareholders, sources said.

ICRA has also placed the `A1+' rating assigned to the Rs 10 crore commercial paper (CP) programme of Ambuja Cement Eastern Ltd (ACEL) and the `LAA(SO)' rating assigned to the Rs 20 crore NCD programme of Hometrust Housing Finance Company Ltd (HHFCL) on `rating watch with developing implications' as these ratings are backed by a letter of comfort/keep foit letter from GACL. Both AECL and HHFCL are subsidiaries of GACL.

"However, the `MA' rating assigned to HHFCL's fixed deposit (FD) programme, which is not backed by a letter of comfort from GACL, has not been put under rating watch," Icra said.

"GACL had initially funded the acquisition of DLF Cement (for Rs 126.60 crore) and ACC (for Rs 455.10 crore) through a mix of internal acquisition and short-term debt. GACL planned to raise $200 million through a GDR offering for repaying the short-term loans and funding these acquisitions. However, GACL had to postpone the GDR issue planned for February, 2000, due to procedural matters and pricing issues," Icra said.

"The likely impact of the GDR offering on GACL's gearing and other financial indicators, would get crystallised only after GACL firms up the details of the offering," Icra added.