MUMBAI, NOV 28: After much dilly-dallying, rating firm ICRA has downgraded the medium-term debt programmes of Apple Finance and Apple Credit Corpn to the default category. The agency has downgraded ratings for fixed deposits and non-convertible debentures (NCDs) of both these companies from `MA-' (under rating watch) to `MD' (indicating default or likely to default), according to an ICRA release.The companies have delayed interest and principal payments on their respective debt obligations of nearly Rs 400 crore to NCD holders and other lenders. The rating assigned to short-term debt programme (commercial paper) has also been revised from A3 (rating watch) to A5 (indicating default).Investors criticised the delay on the part of ICRA to downgrade the rating on Apple. "Rating agencies downgraded CRB Capital only after the company collpased. Now history seems to be repeating,'' said an analyst.It made a whopping loss of Rs 88.81 crore for the quarter ended September 2000. The debt burden has already dampened the merger plans of four NBFCs including Apple Finance. The proposed merger of Srei International, Alpic finance, Apple Finance and Apple Credit is unlikely to materialise.``There was an increase in the NPA (non-performing assets) of AFL as on March 31, 2000, when compared with the March 31, 1999 levels. Also, the ratio of NPAs to the total credit exposures was higher on the more recent date. Additionally, the share of loss assets in the total NPAs of the company increased as on March 31, 2000 because of slippages from sub-standard and doubtful assets,'' ICRA said.ICRA said AFL has been facing tight liquidity conditions with its fixed deposit levels coming down significantly from Rs 213.5 crore as on December 31, 1998 to Rs 81.31 crore as on December 31, 1999. The overall gearing (total debt/net worth) of the company declined from 2.12 times as on December, 31, 1998 to 1.84 times as on December 31, 1999, mainly because of the reduction in short-term borrowings.
