Fitch gives Essar Shipping debt F1+

Fitch Ratings India said it assigned Essar Shipping Ltd.'s INR600 million short-term debt program a national F1+(ind) rating.

Fitch said the rating factors in the company's established position in the energy transportation business and dry bulk and petroleum products handling, relatively modern shipping assets, geographically diversified customer base and a favorable regulatory environment for double-hulled carriers.

It also takes into account Fitch's expectation that the strong trend in the international shipping markets would sustain in the short to medium term.

The agency noted key concerns are the shipping business' cyclical nature and Essar's increasing focus on spot market sales, hence exposing it to earnings volatility although the company follows a dynamic strategy of shifting from spot to contracts and vice versa depending on the market and has also been focusing on sea logistics services to mitigate this risk.

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