India Ratings, a subsidiary of a global rating agency, Fitch Ratings which is dual-headquartered in New York and London, has downgraded ABG Shipyard Limited from ‘IND A’ to ‘IND A-‘. It has also classed it under Rating Watch Negative. Based on a consolidated picture of ABG and its subsidiaries, the rating has been arrived at. The downgrading reflects ABG’s liquidity position and a weak overall credit profile since FY 12. It seems to be the consequence of postponement of payments from a client for its order of two oil rigs under execution to the tune of INR 21,486 million which, in turn, led to a big increase in working capital needs for FY 12 and FY 13 till date. ABG is the largest shipbuilder in the country with operations in Surat and Dahej in Gujarat. It also has a ship repair unit in Goa which is said to be the largest ship maintenance facility in India. Fitch Ratings claims that it is “dedicated to providing value beyond the rating though independent and prospective credit opinions, research and data”.
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