Fitch: KS Oils outlook negative

Fitch Ratings said it revised KS Oils Ltd.'s outlook for its A-(ind) national long-term issuer rating to negative from stable following the recent announcement of the Rs. 2.3 billion acquisition of 50,000 acres of palm plantations in Indonesia. The expenditure will be distributed over the next three years for the acquisition and development of the plantation.

In Fitch's opinion, the acquisition of the palm plantations will help KS Oils to diversify and vertically integrate into the palm oil segment. However, the plantation will take three years to mature and the additional investment, coupled with the company's ongoing capex in India, could increase its financial leverage in the medium-term, the agency said.

The total debt-to-EBITDAR ratio was 1.1 times for 2007.

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