Core Healthcare rating downgraded

ICRA has downgraded the ratings assigned to the non-convertible and partly convertible debenture programmes of Core Healthcare from LBB to LD indicating default. The agency has also downgraded the rating assigned to the fixed deposit programme of CHL from MB to MD indicating default.

The downgradation reflects the inability of the company to repay its debt due to continuous deterioration in its operating performance. The time and cost overruns incurred in the Rs. 891 crore expansion cum diversification programme adversely affected the profitability.

Further, shortage of working capital resulted in low capacity utilisations in all its product lines. The cumulative loss on the balance sheet of the company as on June 30, 2000, was Rs. 614 crores, close to double the reported net worth of the company, Rs. 312 crores, as on the same date. The company, along with the financial institutions, is trying to work out a restructuring package to improve the financial health of the company. However, the rating agency does not expect this to have any significant impact on the debt servicing ability of the company in the near future.

- Corporate Bureau

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Section  : Business
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