McLeod Russell’s share price fell 4.90 percent intraday after rating agency ICRA downgraded the credit rating for the long-term and short-term borrowing of the company.

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At 10:24 AM, the share price was trading at Rs 13.60 per share, down 4.9 percent on the NSE. In the last one year, the stock has tanked 91 percent, and in the last one month, it has fallen 18 percent to the current market price.

ICRA has downgraded the ratings on the Rs 1,031.09 crore fund-based and non-fund bank facilities of McLeod Russell to ‘D’ from earlier “B-‘.

In the company’s press release, it stated the rationale behind the ratings downgrade. It said, “The rating revision factors recent delays in meeting debt obligations in a timely manner. ICRA had earlier highlighted the continued pressure on the liquidity profile of the company owing to high financial exposure to weak group companies, which was largely funded by short-term debt, thus exposing the company to significant refinancing risks.”

It further added that the company had received a majority of the proceeds from the sale of some of the tea estates, the delays in utilising such sale proceeds in debt reduction had resulted in significantly high financial leverage of the company, and the sizeable debt repayment obligations were unlikely to be met from its operational cash flows.

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First Published:Jul 4, 2019 12:42 PM IST