India Ratings downgrades the long-term credit rating of Eveready

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Published: July 18, 2019 3:47:29 AM

The ratings agency had said that the downgrade reflected the firm’s increased exposure to its group companies above the rating agency’s earlier knowledge as the company had guarantees and post-dated cheques amounting to Rs 283.10 crore issued to the group companies as on March 31, 2019.

Eveready, India Rating, downgrade,  credit rating, Eveready industries, Eveready latest news, Eveready share, industry newsThe company recorded a 11.14% fall in its net profit for the fiscal year 2018-19 at Rs 47.82 crore.

Trouble continues for Eveready as India Ratings has again downgraded the dry cell battery maker’s long-term credit rating, citing weakened financial flexibility and low liquidity buffers.

Earlier this month, Yes Bank said it had acquired shares of Eveready Industries amounting to 9.47% of the post-issue paid-up share capital after having invoked its pledged shares following default/breach of terms of credit facilities sanctioned by the bank to Mcleod Russel India, also a debt-laden Williamson Magor Group company.

“We wish to inform you that India Ratings and Research has downgraded the company’s Long term Credit Rating to ‘IND BBB-’ from ‘IND BBB’ and maintained it on rating watch negative,” Eveready said in a filing to BSE.

“The reasons for the said downgraded credit ratings as provided, are continued high leverage and weakened financial flexibility & low liquidity buffers,” it added.

Earlier, India Ratings had downgraded the company’s long-term credit rating to ‘IND BBB’ from ‘IND A+’ and maintained it on rating watch ‘negative’. The ratings agency had said that the downgrade reflected the firm’s increased exposure to its group companies above the rating agency’s earlier knowledge as the company had guarantees and post-dated cheques amounting to Rs 283.10 crore issued to the group companies as on March 31, 2019.

Eveready Industries India’s product portfolio comprises batteries, flashlights and lighting products etc, having a consolidated turnover of Rs 1,541.86 crore in the fiscal year 2018-19 and Rs 1,494.99 crore in fiscal 2017-18. The company recorded a 11.14% fall in its net profit for the fiscal year 2018-19 at Rs 47.82 crore.

Last month, the battery maker stated that its auditor Price Waterhouse had expressed its inability to continue as the company’s auditor. The firm then appointed Singhi and Co as its auditor.

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