MUMBAI : International ratings agency Fitch ratings on Friday downgraded Kishore Biyani's flagship company Future Retail to 'C', after it missed the due date for interest payment on bonds worth $500 million.
In a note, the rating agency said that it had downgraded Future Retail's Long-Term Issuer Default Rating to C from 'CCC+, and the rating on its $500 million 5.6% senior secured notes due in 2025 to C from CCC+'.
The downgrade follows Future Retail's announcement that it was unable to pay the semi-annual interest payment of $14 million on its US dollar bonds on 22 July 2020, the rating agency said.
"The company has a 30-day grace period to satisfy the payment obligations. The company continues to negotiate with banks for the release of further peak working capital facilities, which were due earlier in July, but which the company said were delayed due to procedural issues. It said that it will cure the missed payment when it receives cash inflows from further bank funding, the sale of assets or an equity injection from strategic or financial investors," Fitch said.
However, if this does not happen during the grace period, this will constitute an event of default and Fitch will likely downgrade the company's rating on the bond to RD (restricted default), it added.
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