Care downgrades Bharati Shipyard within days of it being reffered to CDR forum

MUMBAI: Within days of State Bank of India (SBI) referring Bharati Shipyard to corporate debt restructuring (CDR) forum, rating agency Care has downgraded borrowings of the company to inadequate safety from moderate safety. CDR is forum where lenders and borrower mutual decide to restructure the loan.

Revising the ratings, Care said, "The revision factors in difficulty in refinancing of the short tenure loans, elongated operating cycle and further fall in profit margins in first half of fiscal year 2012. Further, the ratings continue to be constrained on account of adverse capital structure, stressed debt servicing indicators, residual project execution risk, high operating cycle and inherent cyclicality in the ship-building sector."

A total borrowing of Rs 6876 crore has been revised one notch lower. The company has long term borrowings of Rs 2327 crore and non convertible debentures of Rs 90 crore which is now revised to BB- grade from BBB+. The company also has long to short term facility of Rs 4450 crore which is revised to BB-/A4 grade from BBB+/A2.

Bharati Shipyard is country’s second-largest private shipyard which acquired controlling stake in Great Offshore two years ago in a bitter corporate battle with the country's biggest private shipyard, ABG shipyard.