Fitch downgrades Emta Coal

Fitch Ratings said it downgraded Emta Coal Ltd.'s national long-term rating to A-(ind) from A(ind), along with its Rs. 1 billion 9% non-convertible cumulative redeemable preferred shares to BBB+(ind) from A-(ind).

The agency also said it assigned A-(ind) ratings on its Rs. 6.99 billion term loans and Rs. 2.15 billion fund-based limits and an F2+(ind) rating on its Rs. 499 million non-fund based limits.

The outlook is negative.

The downgrade reflects the company's tight liquidity position because of mismatches between its actual working capital requirements and current bank limits, Fitch said, and its significant debt repayment schedule over the medium-term.

But the agency said it draws comfort from its long-term agreements with government-owned state power utilities and its long track record in coal mining and its sustained high operating margins.

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