Ashok Leyland downgraded

The rating of Rs 24.2 crore Non-Convertible Debentures (NCD), Rs 20 crore NCD (Series IX), Rs 232 crore Partially Convertible Debentures and Rs 250 crore NCD issued by Ashok Leyland has been downgraded from AA+ to AA. The company’s networth stands at Rs 1030 crore as on September 1997. The revised rating indicates high safety with regard to timely payment of interest and principal. The `FAA+’ rating assigned to the fixed deposit programme of Leyland has been downgraded to `FAA’. `P1+’ rating has been assigned to the company Rs 75 crore commercial paper programme indicating that the degree of safety with timely payment on the instrument is very strong.

Crisil has also has downgraded the rating of Rs. 9.75 crore Deep Discount Bonds of Lloyds Steel Industries Ltd — flagship of the Lloyds group — to `C’ from `BB’ indicating the company is vulnerable to default as it has incurred a cash loss of Rs 33.7 crore during the first half ended September 30, 1997. The company is expected to make further cash losses for the year 1997-98. “The rating factors in the continual deterioration in credit quality due to poor profitability from the steel business arising out of poor demand offtake, low international steel prices for flat steel products and high cost operations”, said Crisil.

The NCD issue of Pennar Alumninium Company Ltd (PALCO) worth Rs 28.2 crores has been downgraded to `D'(default category) from BB indicating that the instrument is in default or is expected to default on maturity. “The revised rating reflects the company’s strained financial position on account of severe competition from imports, reduction in import duty and unremunerative prices for its scrips,” said a Crisil statement.

Pennar is engaged in the manufacture and sale of aluminium strips and conductors.