Fitch cuts Kalyanpur notes

Fitch Ratings said it downgraded Kalyanpur Cement Ltd.'s Rs. 1.173 billion of zero-coupon NCDs to D(ind)(exp) from C(ind)(exp) to reflect the agency's assessment that the company has undergone a coercive debt exchange. The agency re-assigned Kalyanpur a final rating of C(ind) to reflect its post-restructuring credit profile.

The downgrade reflects Fitch's treatment of Kalyanpur's financial restructuring with its lender Vivid Colors Ltd. as "coercive" in line with its criteria on treatment of such restructurings, the agency said.

The restructuring has not resulted in a significant impairment of contractual terms for the creditors, with the revised terms envisaging an extension in maturity, the agency noted. However, the restructuring was essential for Kalyanpur to avoid a liquidity crunch and would have otherwise resulted in a default on its debt obligations.

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