MUMBAI: Credit Rating Information Services of India (CRISIL) has downgraded the ratings assigned to Escorts” two non-convertible debenture (NCD) issues of Rs 150 crore and Rs 20.46 crore by a notch from ”A” to ”A-”, indicating adequate safety.The rating revision reflects the increased likelihood of Escorts being required to raise its investments in the group”s telecom business so as to ensure that guarantees extended by it to the group”s two main telecom companies, Escotel Mobile Communications and Escorts Telecom, were vacated as per the envisaged plan, Crisil said in a release here on Monday.Consequently, the current year”s inflows from the sale of Escorts” investments in Escorts Claas and Escorts JCB may not be available to reduce it”s own debt to the extent that was envisaged earlier, it said.Although group”s promoters have been seeking a financial partner in telecom business for about 18 months, the falling valuations of the business have reduced the realisable cash benefit to Escorts from any such transaction. The current rating reflects Crisil’s expectation that the promoters will be able to attract a financial investor in the telecom business with a relatively small additional investment by Escorts at a valuation that will ensure that their guarantees in this sector will be vacated over the next 12 months, it said. If not, the Delhi-based company’s financial risk profile will be put under strain, further weakening its credit rating, according to Crisil.
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