Fitch puts SREI on watch

Fitch Ratings said it placed SREI Infrastructure Finance Ltd. on Rating Watch evolving after the company announced that it would transfer its infrastructure equipment finance line, which represents 90% of its loan portfolio, to its subsidiary, SREI Infrastructure Development Finance Ltd.

The transfer would infuse Rs. 3.75 billion into the company and significantly improve its liquidity, the agency said. After the transfer, the company will keep the right to finance larger infrastructure equipment, or loan size greater than Rs. 150 million, and project financing, which accounts for a small part of its existing loan portfolio.

The company also could benefit from improved capitalization and access to BNP Paribas Lease Group's expertise in equipment finance, which would bolster its underwriting, Fitch said.

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