Brickwork revises Tulip Telecom` NCD issue rating to BWR C
Brickwork Ratings (BWR) has revised the rating of Tulip Telecom's Rs 125 Crore Non-Convertible Debenture issue to BWR C from BWR BB- rating. Instruments with this rating are considered to have very high risk of default regarding timely servicing of financial obligations.
September 01, 2012 / 14:31 IST
Brickwork Ratings (BWR) has revised the rating of Tulip Telecom's Rs 125 Crore Non-Convertible Debenture issue to BWR C from BWR BB- rating. Instruments with this rating are considered to have very high risk of default regarding timely servicing of financial obligations.
The rating revision factors the delay by the company to redeem in a timely manner, Foreign Currency Convertible Bonds (FCCBs) (including premium on redemption) aggregating to USD 145 mn, which were due on August 26, 2012. Tulip has in its press release dated August 27, 2012, on BSE, indicated that it has partial resources towards the redemption and it is awaiting sanction and disbursements from some of its lenders to raise the balance amount, besides the funds from the issuance of new FCCBs of ~50mn USD and expects to complete this process by September 10, 2012. The company has not responded to queries from BWR in this regard. The company had earlier indicated it has received firm commitment for USD 50 mn towards subscription of its fresh FCCB issue and the issuance of the fresh FCCB’s would be conditional upon the company depositing the balance amount through bank debt into an escrow account initiated specifically for the purpose of redemption of the FCCB’s. Tulip Telecom Ltd, incorporated in 1992 and promoted by Lt. Col (Retd.) H. S. Bedi, is a leading enterprise data connectivity services provider in the country. Tulip designs, implements and manages communication networks of large enterprises on long term contracts to include enterprise communications connectivity through wireless and fiber last mile network coupled with data centers, network integration, managed and value added services. It has a pan India network reaching about 2200 cities. On a consolidated level, Tulip Telecom reported a profit after tax (PAT) of Rs. 116.36 crores on the net sales of Rs. 716.50 crores in Q1FY13 as compared to PAT of Rs. 77.22 crores on the net sales of Rs. 653.88 crores in Q1FY12. As per the Unaudited twelve months results ended March 31, 2012, the company reported a PAT and net sales of Rs. 310 crores and Rs. 2,705 crores respectively as against PAT and net sales of Rs. 306.40 crore and Rs. 2,351 crore respectively in the corresponding previous period.Disclaimer: Brickwork Ratings (BWR) has assigned the rating based on the information obtained from the issuer and other reliable sources, which are deemed to be accurate. BWR has taken considerable steps to avoid any data distortion; however, it does not examine the precision or completeness of the information obtained. And hence, the information in this report is presented “as is” without any express or implied warranty of any kind. BWR does not make any representation in respect to the truth or accuracy of any such information. The rating assigned by BWR should be treated as an opinion rather than a recommendation to buy, sell or hold the rated instrument and BWR shall not be liable for any losses incurred by users from any use of this report or its contents. BWR has the right to change, suspend or withdraw the ratings at any time for any reasons.The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.To read the full report click on the attachment 
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