Fitch cuts Steel Authority of India to BB

Fitch Ratings said it downgraded Steel Authority of India Ltd.’s long-term foreign-currency issuer default rating to BB from BBB-.

The outlook is negative.

Fitch said the downgrade follows the deterioration in the authority’s financial profile after a prolonged weakening in international steel prices.

Steel Authority of India’s debt-funded capex program has magnified the impact of weak prices. It posted an EBITDA loss of Rs. 25.3 billion in the nine months to Dec. 31, 2015, compared with an EBITDA of Rs. 36.8 billion a year earlier, due to weak steel prices, competition from increased steel imports into India and muted steel demand growth in India.

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