Icra downgrades Fortis Healthcare rating
Ratings continue to be on watch with negative implications, says the ratings agency
Ratings agency Icra has downgraded Fortis Healthcare's rating after a recent disclosure that considerable funds were transferred to third parties without the approval of company's board.
According to the ratings agency, outstanding amount towards such entities was Rs 473 crore.
The long-term rating for Rs 250 crore non-convertible debenture programme, Rs 105 crore fund-based limits, and Rs 195 crore term loans has been revised from [ICRA]A+ (pronounced ICRA A plus) to [ICRA]A-(pronounced ICRA A minus).
Further, the short-term rating for Rs 600-crore commercial paper programme and Rs 20 crore non-fund-based facilities has been revised from [ICRA]A1+ (pronounced ICRA A one plus) to [ICRA]A2+ (pronounced ICRA A two plus). The ratings continue to be on watch with negative implications, it said.
The rating action takes into account the disclosure about the advances extended by FHL to related parties which in ICRA's views has a significant impact on FHL's credit and liquidity profile.
ICRA had been deriving comfort from FHL's strong liquidity position; with the above-mentioned development, the company's financial flexibility is expected to be constrained.
Repayment of the said instruments by these entities has already commenced but considerable amount is still outstanding, and the timing and quantum of recovery of the same can't be ascertained.
ICRA also said that Malvinder Singh (Executive Chairman)and Shivinder Singh (Non-executive Vice Chairman) have tendered their resignations.
ICRA will continue to closely monitor the developments and take rating action, as and when more clarity emerges, the statement said.