Essar Shipping in default category

Essar Shipping in default category
ENS ECONOMIC BUREAU

MUMBAI, SEPT 15: After Essar Steel, another Ruia group firm is in trouble. The Credit Rating Information Services of India Ltd (Crisil) has downgraded the ratings for the Rs 75.1 crore and Rs 78.6 crore non-convertible debenture (NCD) programmes of Essar Shipping Ltd to the default category.

Both the NCDs have been downgraded from `C' to `D', Crisil said in a release here today adding that ``the revised rating indicates that the instrument is in default.''

It may be recalled that the group had earlier defaulted on its floating rate notes raised from a group of international and domestic investors. In fact, Essar Steel was the first company in Indian corporate history to do so. The company has promised payment (in a roll-over scheme) to its investors in the years to come which the debtors have agreed to.

Earlier, Essar Shipping had transferred its Vadinar-based terminals and jetty to group firm Essar Oil citing synergy between the oil and jetty business.

PARRYS DOWNGRADED: Meanwhile, the Crisil has also downgraded the Rs 16.23 crore debenture issue and the fixed deposit (FD) programme of Parrys Confectionery Ltd (PCL).

The debenture issue was downgraded from `AA-' indicating high safety to `A-' indicating adequate safety, it said. CRISIL scaled down the rating for the FD programme from `FAA-' to `FA' indicating adequate safety.

Revision on ratings in case of PCL reflects the steep deterioration in the company's business profile and consequent impact on its finances, CRISIL said.

The rating was also constrained by the significant difficulties facing PCL in regaining its past profitability and market share, Crisil said adding, however, it finds support from the Murugappa group's shareholding in PCL.