The company's net debt currently stands at Rs 1700 crore which it aims to pare by Rs 200-300 crore by CY15-end by monetizing non-core assets, says Yogen Lal, chief executive officer, Pratibha Industries.
Yogen Lal, chief executive officer, Pratibha Industries says rating agency CRISIL downgrade is totally unacceptable by the company and the company has asked the rating agency to discontinue the rating in the future.
Speaking to CNBC-TV18, Lal says the company is comfortably serving its debt as of today.
The company's net debt currently stands at Rs 1700 crore which it aims to pare by Rs 200-300 crore by CY15-end by monetizing non-core assets.
Below is the verbatim transcript of Yogen Lal's interview to CNBC-TV18's Latha Venkatesh and Sonia Shenoy
Sonia: Can you highlight the key reasons why CRISIL has downgraded the rating and what the company plans to do to improve its debt profile?
A: CRISIL has downgraded the rating to BB plus negative. I think they were concerned about the high levels of inventory on our balance sheet and our ability to service that. Here I would like to clarify that the company has been rated by two other independent rating agencies already and that is rated at A minus and BBB plus. We have conveyed to CRISIL that the rating given by CRISIL is not acceptable to us and have requested them to discontinue the rating in future.
As far as the debt situation is concerned we are comfortably servicing our debt as of today and we don't see any undue stress or delays in repayments or payments of servicing our debt. As you already know we are in the process of looking at monetising our noncore assets to be able to deleverage and that is an ongoing process and we expect that we would be in a position to see some action happening in the balance part of this financial year.
Latha: Your interest cost have been rising so if you can give us an idea of what exactly is the debt to equity at this point in time, what is the total debt, what is the quarterly interest outgo?
A: Our net debt stands at around Rs 1700 crore with net worth of around Rs 700 crore that we have. So the quarterly interest outgo is to the tune of around Rs 65-70 crore.
Latha: You said you are thinking of pairing down some noncore assets to bring down the debt, what might the debt be by the end of the current financial year or by the end of calendar 2015?
A: See calendar 2015 is where we feel the debt positions might be down by around Rs 200-300 crore as compared to the current levels.
Sonia: What are the non core assets that you have currently that you are looking to sell and by when do you think this sale could be completed?
A: We have the SAW pipe division for which we have already disposed of the equipments. We have 35 acres of land on which the factory rests at Wada and we have our office commercial space of around 45000 square feet in Mumbai. And we have a securitisation of our BOT asset, they are lease rentals from our BOT assets in Delhi. So these three possibilities can add upto around Rs 250-300 crore.
Pratibha Ind stock price
On December 03, 2014, at 14:13 hrs Pratibha Industries was quoting at Rs 48.30, down Rs 2.95, or 5.76 percent. The 52-week high of the share was Rs 66.70 and the 52-week low was Rs 22.20.
The company's trailing 12-month (TTM) EPS was at Rs 5.02 per share as per the quarter ended September 2014. The stock's price-to-earnings (P/E) ratio was 9.62. The latest book value of the company is Rs 67.48 per share. At current value, the price-to-book value of the company is 0.72.
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