Following is the text of press release issued by
Quote
The ratings reflect
The Company has modest leveraging and a large asset base but higher finance cost and low cashflows have resulted in weak coverages. This trend is expected to continue as cashflows may further deteriorate. The management intends to dispose of some of its properties (real estate assets) to supplement liquidity and meet sizeable upcoming debt repayments. However, material progress is yet to be seen, as buyers are sidelined in current scenario of the industry. Financial support from sponsors remains imperative in the short term.
Ratings are dependent on effective implementation of envisaged strategy to improve cashflows while maintaining modest leveraging and strengthening coverages. Any significant delay in commencement of new projects and/or further deterioration in margins, leading to weak coverages and pressure on liquidity, will have a negative impact on ratings. Meanwhile, maintaining sufficient cushion for debt repayment remains crucial. Support from sponsors is critical.
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