S&P downgraded Rolta India Ltd. to CCC- from B+ as the company missed a $6.8m interest payment on its 10.75% 2018 unsecured notes. Rolta India was the guarantor of the note.
The payment was due on 16 May 2016.
Further, ratings on the subsidiaries of the India-based IT solutions firm, Rolta Americas LLC and Rolta LLC were also downgraded to the same level as Rolta India Ltd.
As per S&P, it appears that there is uncertainty on the company’s ability to meet its interest payment within the 30-day grace period ending on 15 June 2016.
However, company CEO K.K. Singh stated that the company was confident in making the interest payment before the end of the grace period.
The company’s receivables had increased from 120-125 days to 180-190 days, leading to a cash crunch.
A credit ratings change, in future, would hinge on the company’s ability to make the above mentioned interest payment.
Source: Business Standard