Eros International Media Ltd plunged on Friday, bringing its two-day slump to 30 per cent after Care Ratings downgraded the company’s creditworthiness, citing delays or likely default in servicing of bank loans.
The film-makers stock suffered a rapid erosion in market value this week after CARE cut the long-term bank facilities rating 10 notches to D, or default from BBB.
“As previously communicated through our Indian subsidiary, Eros International Media Ltd. was late on two loan interest payments for April and May 2019. These interest payments total less than $2 million and are currently in process of remittance,” the United States (US)-listed parent Eros International Plc said in a clarification to the exchanges.
The company’s downgrade came on the same day the Indian unit of S&P Global Inc reduced Dewan Housing Finance Corp’s rating to default after the mortgage lender missed debt payments. Dewan’s shares slumped 16 per cent on Thursday.
The country’s financial system has been facing cash woes since last year when multiple defaults by IL&FS forced the government to intervene and exposed weaknesses in the shadow banking sector. The funding crunch in the shadow banking sector has begun to weigh on the nations economic growth, which recently slowed to a five-year low.
Eros International, which acquires, co-produces and distributes Indian films, was India's first media company to list on the New York Stock Exchange (NYSE) -- its ADRs crashed 49 per cent on Thursday. The Mumbai-listed stock has slumped 47 per cent this year after sliding almost 56 per cent in 2018.