Fitch upgrades Kotagala Plantations

Fitch Ratings said it upgraded Kotagala Plantations plc's national long-term rating to B+(lka) from RD(lka). The agency simultaneously upgraded the national long-term rating of Kotagala's outstanding senior unsecured debentures to B+(lka) from C(lka).

“The upgrade reflects the completion of Kotagala's debt restructuring process in May 2023,” Fitch said in a press release.

Kotagala secured waivers for accrued and past-due interest and received maturity extensions.

“The company restructured its outstanding LKR 500 million debentures in September 2020 and around LKR 1.2 billion of its bank loans by extending the maturity and reducing interest costs. In return, some lenders required timely settlement using tripartite agreements that directed revenue of certain estates directly for debt servicing. The company said it is now up to date on all restructured obligations,” Fitch said.

Additionally, the agency noted, “Kotagala is in discussions with banks for new credit facilities following the completion of its debt restructuring, but its ability to meaningfully access external funding remains untested.”

The outlook is negative.

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