ICRA raises red flag over United Spirits outstandings

Puts loan facilites under "Watch With Developing Implications"

ICRA, among the top credit rating agencies, has raised the red flag over United Spirits' state of affairs over huge net loss as well as heavy provisions, and has put the various loan facilites of USL under "Watch with developing implications" tag.

According to a statement from ICRA, it has placed the outstanding term loan of Rs 320 crore, fixed deposits of Rs 400 crore, fund-based facilities of Rs 2,100 crore and non-fund based facilities of Rs 400 crore under this "watch with developing implication tag".

The rating action follows the recent announcement of USL's financial results for 2013-14 and the qualified opinion issued by the Company's statutory auditors in relation to the financial statements of the Company.

 

"During 2013-14, the Company reported substantial net losses (to the extent of Rs.4,488.8 crore on consolidated basis) owing to large one-time provisioning / write-offs towards

doubtful advances, diminution in the value of investments and intra-USL group loans. Further, presence of a possible "wilful defaulter" on the Company's Board may impact the Company's financial flexibility," ICRA said in a statement.

ICRA will continue to monitor the developments in these regards and evaluate the impact of the same on the credit profile of USL as and when further details are available.