THIRUVANANTHAPURAM: Infomerics Ratings has downgraded the ratings assigned to the close to Rs700 crore bank facilities enjoyed by Uralungal Labour Contract Cooperative Society Ltd (ULCCL).
Infomerics said it has kept Uralungal under ‘Issuer Not Cooperating’ due to ‘lack of adequate information available, non-payment of annual surveillance fees and the uncertainty around its credit risk.
No clue
However, the top officials of the society seem to be in the dark about this. When businessbenchkark.news reached out to the managing director of ULCCL for a response, he said he hadn’t heard about the development.
UICCL enjoys several unique features, the foremost of which being the 82 per cent government shareholding in the society.
And by the virtue of this, Uralungal has been able to bag several contracts in the government sector without even going through a competitive bidding process.
Present rating
The present rating from Infomerics is IVR B (INC)(Downgraded) with a Negative outlook. This rating is typically assigned when there is not enough information available to assess a company’s financial performance or its ability to service debt.
Infomerics has stated, “The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as this rating may not adequately reflect the credit risk profile of the entity.”
Non-cooperation by Issuer
Infomerics said it has been regularly following up with the company to provide the required data and No Default Statement (NDS) to monitor its assigned rating to the bank facilities.
It has made mail communications to ULCCL dated September 02, 2024, September 04, 2024, September 05, 2024, and concurrently over several phone calls.
However, despite repeated requests by Infomerics, the company’s management has not submitted the essential details/information for surveillance exercise.
Availability of information is very critical in the rating exercise. In the absence of the requisite information, Infomerics, in accordance with SEBI guidelines, stated that it must assign the rating based on the best available information.
Infomerics explains
Once an assigned rating is accepted by a rated entity, it becomes the responsibility of Infomerics to carry out monitoring of the rating until the outstanding under the rated instrument and/or facilities is completely paid off or until the investor and/or lender agrees for withdrawal of the rating at the instance of the issuer and/or borrower.
“As a matter of practice and prudence, Infomerics seeks to monitor the performance of the issuer on the basis of monthly No Default Statements (NDS), available market information and quarterly operational data/results declared by the issuer from time to time,” the agency added.
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