CRISIL has downgraded its ratings on the bank loan facilities of Asian Hotels (North) Limited (AHNL) to 'CRISIL B/Stable' from 'CRISIL BBB-/Stable'.
The downgrade reflects non-servicing of interest due on April 15, 2019 towards unrated External Commercial Borrowings (ECB) on account of an ongoing dispute with regards to Withholding tax refundable to AHNL by the lender. Although, company had adequate liquidity to service the interest obligations on time, in the form of unutilized bank limits and cash and bank balances, the delay was triggered on account of the tax dispute remaining unresolved as on date. Further, company is meeting its debt obligations on rated facilities in a timely manner. Additionally, the management failed to highlight the delay in the No Default Statement shared with CRISIL for April 2019 and hence misrepresented this fact.
Further, company's financial risk profile weakened in fiscal 2019 due to increase in interest cost, resulting in a weak interest cover and accruals as against CRISIL's previous expectation. CRISIL believes the financial risk profile will remain weak over the medium term.
The rating reflects a weak capital structure and debt protection metrics, driven by large term debt, high geographic concentration and susceptibility to economic downturns. These rating weaknesses are partially offset by the company's established market position in the hospitality industry, driven by long-standing experience of the promoters, continued association with 'Hyatt' brand. This in turn leads to strong visibility and healthy revenue from Food and Beverage (F&B) segment, supporting the operating margin.
Shares of Asian Hotels (North) Limited was last trading in BSE at Rs.134.9 as compared to the previous close of Rs. 127.9. The total number of shares traded during the day was 603 in over 10 trades.
The stock hit an intraday high of Rs. 139 and intraday low of 125. The net turnover during the day was Rs. 79509.