Brickwork Ratings downgrades the ratings for the Bank Loan Facilities of Rs109.37cr of Digital Venture Pvt. Ltd, a material wholly-owned subsidiary of
Zee Learn Limited and places the rating under negative outlook and the Issuer did not cooperate.
“The rating downgrade is on account of the uncertainties regarding the one-time restructuring (OTR) status and non-cooperation by the company in providing the details/date of invocation of restructuring and the status of the same with the lending bank,” company shared Briskwork’s rationale of rating.
“The company has informed that it has requested the lending bank for OTR under RBI Covid scheme. BWR had followed up with the lending bank as well as the company to provide the OTR invocation date through various mails dated Jan 22, Feb 10, Feb 15, Feb 22, Feb26, March 9, March 12, March 15 and telephone calls. However, the same has not been received by BWR reflecting uncertainties regarding status of the loan restructuring,” it added.
It further said that the rating takes comfort from the past stable performance of the company, and favourable demand supply factors for quality school education in the country in future. The rating is however, constrained by the increasing competition in the business of school education, inherent regulatory risk associated with the education business and inadequate cash flows resulting in secking One Time Restructuring.
The rating has been placed on a negative outlook on account of uncertainties about restructuring in absence of receiving the date of invocation and other updates, the company’s revenues and liquidity owing to disruption of business activities under Covid-19 pandemic, and uncertainties regarding payment of the dues in near term.
Zee Learn Ltd trade on Monday ended at Rs10.76 per piece down by Rs0.23 or 2.09% from its previous closing of Rs10.99 per piece on the BSE.