 "Rolta blames slow govt receivables for interest payment delays")
Technology solutions and services firm Rolta today in a statement said that the company is facing working capital stress over the past few months due to delay in payment from projects in the defence sector, due to which its has been unable to meet its recent obligations towards interest payment on Bonds / ECB installment.
“Rolta has had to continue incurring significant expenses on a very prestigious and time bound defense project, which requires considerable ongoing investment; while at the same time the Company has suffered unexpected delays in large payment collections; thereby facing working capital stress over the past few months,” said a company statement.
According to report filed by Reuters bondholders are forming a group to negotiate debt restructuring at Rolta. “Over 25 per cent of the holders of the two bonds have agreed to join the group being organised by Investment bank Houlihan Lokey and law firm Ropes & Gray, according to one source familiar with the formation of the group,” said the report.
Rolta has missed a $6.8 million interest payment on its 10.75 per cent 2018 unsecured notes, the payment was due on May 16, 2016.
Rating agencies S&P Global Rating and Fitch Ratings cut the company's credit score. Fitch cut Rolta's rating to restricted default, from CC, and S&P Global lowered its rating to SD, or selective default, from CCC-minus, due to missed interest payments.
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Earlier this week, S&P Global Ratings on Monday lowered its long-term corporate credit rating on Rolta India to 'CCC-' from 'B+'. At the same time, the credit rating firm lowered its long-term issue rating on the senior unsecured notes that Rolta Americas and Rolta issued to 'CCC-' from 'B+'. Rolta guarantees the notes.
The company is now scheduled to pay coupon on its $300 million 2019 notes due in July.
The company said that the management is diligently working on addressing the overall situation in a comprehensive manner in consultation with its bankers and strategic advisors. “The aim is to arrive at an acceptable solution in the interest of all stakeholders and the Company will be informing all stakeholders at the earliest possible opportunity and is committed to finding a viable resolution,” said a statement.
Revenue for the fourth quarter ended March 31, 2016 slipped 10.5 per cent at Rs 846 crore from last year's fourth quarter revenue of Rs 946 crore. On a sequential basis, revenue declined 13.7 per cent. For the full year, the company reported net profit at Rs 189.11 crore, declining 22.9 per cent from Rs 245.17 crore and revenue for the year grew 3.3 per cent at Rs 3,799.6 crore.
