Fitch lowers Lodha Developers view to negative

Fitch Ratings said it revised the outlook on Lodha Developers Ltd. to negative from stable and affirmed the long-term issuer default rating at B.

Fitch also said it affirmed the $325 million 12% senior unsecured bond due in 2020, issued by Lodha Developers International Ltd., and guaranteed by Lodha and certain subsidiaries, at B with a recovery rating of RR4.

The negative outlook reflects Lodha's weakening liquidity position, as cash and operating cash flow will be insufficient to meet Rs.69 billion of debt maturities due in the financial year ending March 2020, Fitch said.

The agency said it expects repayments on the £290 million construction-finance loan at Lodha Developers 48CS Ltd. due December 2020 to be covered through project sales and Indian debt maturities of Rs. 20 billion to be refinanced in light of Lodha's large inventory and land bank.

But the agency said it believes addressing the remaining maturities will require alternate funding sources, like asset sales and inventory financing.

The ratings also reflect Lodha's strong positioning with the highest volume market share in the Mumbai metropolitan region, Fitch said, and de-leveraging capacity as the company completes the construction of its London projects and starts to access cash from 2020 through 2022.

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