Financial Daily from THE HINDU group of publications
Thursday, Dec 16, 2004
Financial Daily from THE HINDU group of publications Thursday, Dec 16, 2004 |
|
|
|
|
|
Home Page
-
Corporate Disputes Corporate - Outlook Spat may hit Reliance's strategic direction: S&P Our Bureau
Mumbai , Dec. 15 THE ongoing spat between Reliance Industries Chairman, Mr Mukesh Ambani, and Vice-Chairman, Mr Anil Ambani, could affect the group's strategic direction, according to international credit rating agency Standard & Poor's. The differences could weaken businesses other than the group's core activities of oil refining and petrochemicals, the agency said. In a credit analysis, S&P said the outlook on Reliance's local currency rating is stable. The agency said a review of the rating would be called for if there is a substantial change in the group's structure or its business plans. The rating agency in a statement today said, "The current differences between the Chairman and Vice-Chairman of Reliance have a greater potential to weaken the Reliance group's other businesses, rather than its core oil refining and petrochemicals businesses, particularly its day-to-day operations. In addition, these differences could affect Reliance's strategic direction, and a substantial change in Reliance'sbusiness plans or the group structure will require a review of its rating". The agency further pointed out that the company's liquidity is weak. As on March 31, 2004, Reliance had a Rs 64-billion debt falling due in the next 12 months. Against this, it had a cash and equivalent of Rs 2 billion and a bank line of Rs 40 billion from a consortium of Indian and foreign banks, S&P said. In the event of a default by Reliance, recovery prospects on its debt are low in the near to medium-term. This reflects the weakness in India's legal system on foreclosure law, which was recently strengthened but remains mired in legal controversies, the agency said.
More Stories on : Corporate Disputes | Outlook | Petroleum | Credit Rating
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2004, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|