Fitch: Abans view to negative

Fitch Ratings said it revised Sri Lanka-based retailer Abans Ltd.'s outlook to negative from stable.

The national long-term rating was affirmed at A-(lka). The agency has also affirmed Abans' outstanding unsecured redeemable debentures at national long-term A-(lka) and its outstanding commercial paper at national short-term F2(lka).

Fitch said the negative outlook reflects an increase in Abans' net leverage (lease-adjusted net debt/operating EBITDAR, excluding Abans Finance plc) to 4.6x for the financial year ended March 2013 (FYE12: 2.67x), above the negative rating trigger of 4.5x.

The increase was primarily due to higher debt incurred to fund Abans' share of its upcoming Colombo City Mall joint venture, as well as due to bridging finance extended to a new related company that houses what was once Abans' motorcycle retail business, the agency said.

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