MUMBAI: Rating company CARE has cut the creditworthiness of entertainment firm Eros International Media (EIML), citing delays or likely defaults in serving debt availed from banks.
The company tapped a credit line of Rs 750 crore through a combination of long-term and short-term bank loans, and other forms of bank credit.
The downgrade will likely hit EIMLs fund raising plans.
“As per the management, the delays/default in debt servicing is on account of slowdown in collection from debtors leading to cash flow issues in the company,” CARE said in a statement.
It has lowered the long-term loan facilities to D or default from BBB-, a plunge in grades by several notches reminiscent of the sharp downgrades at infrastructure conglomerate IL&FS.
CARE interacted with EIML's bankers. The defaults/delays included both principal repayments and interest payments. In some cases, delays extended to more than 30 days for servicing interest on cash credit and packing credit, and a delay of more than 30 days in payment of bills.
“Eros tried to raisRead More – Source