RHC Holding Pvt. Ltd (RHC), a holding company which owns shares in Fortis Healthcare and Religare Enterprises, has been downgraded to ‘Default' rating by India Ratings & Research. The default rating was assigned after the company missed scheduled coupon payments on its non-convertible debentures in June.
In a note dated July 14, India Ratings said that outstanding debentures worth Rs 200 crore have been downgraded to ‘D' from an earlier rating of A, which was assigned in September 2016. The rating on three other outstanding instruments has also been downgraded, said the agency while adding that this reflects the group's impaired debt servicing capability due to its stretched liquidity position.
RHC has been unable to meet its planned deleveraging target through the monetisation of non-core assets, as envisaged earlier. However, the company has been able to reduce debt to Rs 2950 crore at FYE17 from Rs 4130 crore at FYE16 through the sale of some stake in its subsidiary Fortis Healthcare Limited (FHL).India Ratings & Research
The coupon payments on the downgraded debentures were due on June 27 and have now been rescheduled for July, said the rating agency.
On July 13, Mint newspaper reported that RHC Holdings has approached lenders, including private equity firms KKR & Co. and Piramal Enterprises, to raise funds to meet repayment obligations. The group has found itself facing a liquidity squeeze after Singapore's IHH Healthcare backed off from acquiring a controlling stake in Fortis Healthcare and SRL Diagnostics.
Shares of Religare Enterprises rebounded on Friday after a steep fall earlier this month. The stock closed at Rs 112.70 per share, up 8.6 percent compared to its previous close.
Note: This story corrects an earlier version where the size of the NCD issue downgraded was incorrect.
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