Deccan Chronicle slips over 3% on CARE downgrade

NEW DELHI: Deccan Chronicle Holdings Ltd slipped over 3 percent in trade on Thursday after rating agency CARE, downgraded the firm's short-term borrowings to default grade.

The Hyderabad-based Deccan Chronicle Holdings defaulted on its debt obligations. “The company has not offered any explanation for the miss in payments,” CARE said.

At 09:58 a.m., Deccan Chronicle was trading 3.4 percent higher at Rs 31.15. It has hit a low of Rs 29.20 and a high of Rs 31.40 today.

"The revision in rating is due to default by the company on short-term non-convertible debentures (NCD). As per submissions, the company had a cash/FD balance of Rs 372 crore as on December 31 and gross cash accruals amounting to Rs 20 crore. Despite the liquidity, the company has defaulted on its debt obligations. The company has not offered any explanation regarding the same," ET reported, citing a CARE statement from July 2.

ET learns that the company raised close to Rs 500 crore from institutional investors - including insurance funds, term lenders and mutual funds - a year ago. It managed to retire debt of about Rs 300 crore, but fell short on repayment to some institutional investors, including Pramerica.

As per data collated from Value Research, Deccan Chronicle Holdings accounted for 1.3 percent of Pramerica's liquid fund, 3.3 percent of its ultra short-term bond funds, 6.2 percent of credit opportunities fund, 4.8 percent of dynamic monthly income fund and over 5 percent of Pramerica Dynamic Fund on 31 May 2012