Business Daily from THE HINDU group of publications
Saturday, Aug 04, 2007
ePaper
Business Daily from THE HINDU group of publications Saturday, Aug 04, 2007 ePaper |
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Corporate
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Credit Rating ‘Triple A’ doesn’t enthuse Ashok Leyland
Our Bureau Chennai, Aug 3 Though a blue chip, Ashok Leyland is only an ‘AA’ rated company. Its Chief Financial Officer, Mr K. Sridharan, says that the company will not strive for ‘AAA’ rating. The ‘AAA’ rating imposes an unnecessary burden on the company, affecting shareholders’ value, he told a National Conclave on Changing Face of Financial Leadership organised by the CII. The burden comes in the form of additional capital required for the level of business. Instead of equity, the company could use debt funds more effectively, Mr Sridharan said. And when it comes to borrowing, Ashok Leyland would take the ECB route to the extent as would match its exports – to provide a hedge against exchange rate fluctuations – no more, no less. Incidentally, in the current year, the company would be borrowing $250 million through the ECB route. The funds will be raised shortly. This is good news for shareholders if the rupee appreciates further, because the consequent in savings in repayment will be captured in each quarter’s profit and loss statements, boosting the bottomline.
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