The business ventures of construction group Madhucon Projects Ltd continue to be hit by stretched financial profile.
ICRA has downgraded long term rating for Nama Hotels P Ltd (NHPL), Madhucon’s hospitality arm, to “D” from “BBB” for delays in debt servicing. Instruments with “D” rating are in default or are expected to be in default soon.
NHPL is special purpose vehicle floated by Madhucon for vesting the assets of a hotel property in Hyderabad.
ICRA in its statement said rating action takes into account delays in servicing loans by the guarantor Madhucon Projects. There also non-observance of the guarantee structure (covering interest and principal obligations on rated debt).
Nama Hotels, set up in December 2007, is constructing a three cum four-star hotel property on 2.62 acres land parcel in Kukatpally abutting NH-9, Hyderabad. The proposed facility is slated to have 496 rooms (303 rooms – 4 star, 149 rooms – 3 star and 44 service apartments).
The company has tied up with Intercontinental group for its brands Holiday Inn and Holiday Inn Express for the proposed mixed use facility. It had incurred a project cost of about Rs 74 crore till end December 2011. It is partly funded by debt of Rs 43 crore and remaining as promoter’s equity and unsecured loans.
