Icra downgrades IFCI

Credit rating institution Icra on Tuesday downgraded the rating of ailing IFCI Ltd, even as the financial institution was wooing creditors and banks for securitisation of its 8216;good8217; assets and rollovers. Icra has downgraded IFCI to the risk-prone category for short-term and inadequate safety for medium-term and long-term ratings8212;from A2, MA and LA- to A4, MB and LBB, respectively. The revised short-term rating indicates risk prone and the medium and long-term ratings indicate inadequate safety. The revised ratings have been placed on rating watch with negative implications, it stated in a press release.

IFCI chairman V.P. Singh termed the revision of the rating 8216;hasty8217; and its timing as 8216;unfortunate8217;. He said he had met a number of bank chiefs and some creditors and after presenting the latest status report on the FI had been assured of their support.

Government officials said the indications were that IFCI could raise may be Rs 2,000-3,000 crore by securitising some of its good assets with banks. This would help it to at least meet all its interest liabilities, they said, though they expressed deep concern at the worsening fortunes of the FI. However, they ruled out further financial assistance that IFCI has been asking for.

It is reliably learnt that Icra held back its move for a month. Icra had placed IFCI on rating watch in September 2001, as it was taking various measures to restructure its liabilities and improve its financial fundamentals. For the rating review, Icra has taken into account the likely response of the sovereign authorities to support IFCI.