The ratings agency is at present reviewing the liquidity position of the company.
ICRA has downgraded the ratings on the term loans and long-term fund based limits of United Spirits Ltd (USL) to ‘D’ from ‘BB’ (Stable).
The rating agency has also downgraded the ratings on both the short-term fund based and non-fund based limits to ‘D’ from ‘A4.’
In a statement, ICRA said the revision in USL’s bank line ratings reflects delays in debt servicing by the company in the month of March, 2012.
According to information shared by the management, these delays, however, have since been corrected.
ICRA is in the process of reviewing the current liquidity position of the company and would take up a review of the ratings accordingly.
The rating assigned by ICRA are in respect of USL for term loans (Rs 1,800 crore) and long-term fund based limits (Rs 1,300 crore), short-term fund based limits (Rs 100 crore) and short-term non-fund based limits (Rs 25 crore).
The rating on USL’s medium-term fixed deposits (Rs 500 crore) has been retained at ‘MB’ as there have been no delays (in the payment of interest) in the same. USL is the flagship company for the spirits business of the UB Group.
With a total sales volume of 122.8 million cases for 2011-12, USL remains the world’s largest distiller.
Promoter Vijay Mallya is in talks with Diageo to sell a part of his 28 per cent take in USL to the latter.
Proceeds from the stake sale is expected go into reviving his beleaguered airline, Kingfisher.