(The following statement was released by the rating agency)
May 30 - Fitch Ratings has downgraded India-based Celestial Biolabs Limited’s (Celestial) National Long-Term rating to ‘Fitch D(ind)’ from ‘Fitch BB(ind)'/Stable. A list of additional rating actions is provided at the end of this commentary.
The downgrade reflects Celestial’s continuous defaults on debt repayments and irregularities in its utilisation of term loan and working capital facilities over the last three months. This is a result of delays in the commissioning of its greenfield manufacturing facility. The new facility, which was scheduled for H2FY12, is likely to be commissioned by September 2012.
Fitch notes that Celestial’s revenue declined by 34% yoy to INR126m in the nine months ended December 2011 (9MFY12) as the company exhausted its working capital facilities to make interest payments on its term loan facility
Positive rating action may result from regularisation of working capital facilities and timely debt servicing in term-loan accounts for two continuous quarters.
Celestial is a Hyderabad-based pharmaceutical company, which was started in 1997 as a Bio-IT software service provider for International drug discovery companies. In 9MFY12, EBITDA was INR39m (FY11: INR73.6m) and EBIDTA margin was 30.9% (29.2%).
Rating actions on Celestial:
- INR40m fund-based working capital limits: downgraded to ‘Fitch D(ind)’ from ‘Fitch BB(ind)'/‘Fitch A4+(ind)’
- INR150m term loan: downgraded to ‘Fitch D(ind)’ from ‘Fitch BB(ind)’
- INR10m non-fund-based facility: downgraded to ‘Fitch D(ind)’ from ‘Fitch A4+(ind)'