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Cox & Kings defaults on another CP; faces rating downgrades

Mumbai: Cox and Kings defaulted on yet another commercial paper on Monday, after the default last week, and saw a slew of ratings agency downgrades as it grapples with a liquidity crisis.

In a late evening release on BSE, it said it had defaulted to the extent of Rs 50 crore, out of Rs 65 crore CP maturing on Monday.

Separately, it also said Brickworks and Care Ratings downgraded various instruments of the company. Care Ratings downgraded the company’s Rs 375-crore CPs to ‘D’ rating from A+, and Rs 1,685 crore CPs to A4 from A+.

Brickworks cut rating on the company’s Rs 375 crore CPs and Rs 1,685 crore CPs to ‘D’ from A1+ earlier.

Care also cut the non-convertible debentures (NCD) ratings, long-term facilities, and issuer rating of the company to BB from AA-. Brickworks also cut Rs 50 crore NCD rating to C from AA-.

“The working capital situation at Cox & Kings stretched in the last few months and was further impacted due to its inability to replace the short term loans with long term loans / regular working capital lines,” Cox and Kings said in a press release.

“The company is taking all required measures to resolve the temporary cash flow mismatch. It is evaluating each business and identifying ways to improve operational performance. The company is focusing on cash flow generation from each business and working at the highest priority to free working capital,” it said.

The company said it will also be approaching its lenders to work out some time bound program to meet this emergency.

On Thursday, Cox & Kings had said it failed to meet a debt repayment obligation towards maturity of unsecured commercial papers on June 26. Out of an aggregate amount of Rs 200 crore, the company managed to pay Rs 50 crore while the balance amount of Rs 150 crore remained unpaid, the company said.
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