ICRA has downgraded Tata Teleservices (Maharashtra) Ltd.’s credit rating, citing weak operational and financial performance. The rating agency further said that it was also “monitoring” the ongoing tussle at the group level after the sudden sacking of Cyrus Mistry as group chairman.
Incidentally, the downgrade by ICRA comes just a day after leading rating agency Crisil downgraded the bank loan facilities of the company to ‘CRISIL A-/Negative/CRISIL A2+’ from ‘CRISIL A/Negative/CRISIL A1’.
ICRA has downgraded the long-term rating to A- from A for the Rs.359 crore term loans, Rs.465 crore long-term fund based/non-fund based limits and Rs.188 crore unallocated limits of the company. The outlook on the long-term rating has been reaffirmed at negative.
“The rating action factors in the continuing weak operational and financial performance of the company marked by year on year decline in revenues over the last three quarters, consistent pressures on profitability and strained debt coverage indicators,” said a statement by ICRA, which was released by the company to the stock exchanges.
The Q2 performance was further impacted by higher amortisation expense and finance cost owing to capitalisation of spectrum acquired in the March 2015 auctions, it added.
The rating agency further said that it “has taken note of the recent announcement regarding the replacement of the chairman at Tata Sons.”
