Hindustan Development Corporation Ltd

• Non convertible debenture - Rs. 9.84 crore Rating : D
• Non convertible debenture - Rs. 9.75 crore Rating : D
• Non convertible debenture - Rs. 89.93 crore Rating : D (reaffirmed)

A 'D' (pronounced single D) rating has been assigned to the Rs. 98.4 Million (Mn) Non-Convertible Debenture programme of Hindustan Development Corporation Limited (HDC). A 'D' (pronounced single D) rating has also been assigned to the Rs. 97.5 Mn Non-Convertible Debenture programme of the HDC. The 'D' (pronounced single D) rating assigned to the Rs. 899.3 Mn Non-Convertible Debenture programme of company has also been reaffirmed.

The ratings reflects the sustained week liquidity position of the company on account of the continued delays in stabilisation of its steel division, the indifferent performance of its other divisions, the company's inability to recover the funds blocked in Inter Corporate Deposits (ICDs) and the large repayment obligations, in future. These factors have continued to put significant strain on the company's cash flows and its ability to honour its financial obligations. The rating also takes into consideration, the roll-over of the principal redemption of the rated debentures, as per the notice given to the debenture-holders.

Hindustan Development Corporation Limited (HDC), promoted by the Calcutta based Shri R. P. Mody, is a multi-product, multi-locational company engaged in the manufacture of wide range of products viz. railway products/wagons (Engineering Division), steel wires (General Engineering Works Division), alloy steel (Steel Division), calcined petroleum coke & carbon electrode paste (Petro Carbons & Chemicals Division), cyanide based chemicals (Cyanide Division), jute textiles/fabrics (Jute Division) and electrical insulators (Insulator Division). The company is presently proposing to hive off its six divisions (except the steel division) to an affiliate company, Hindustan Engineering & Industries Limited, with effect from April 1, 1999. During the year 1998-99, the company reported a loss of Rs. 6.9 Mn on a gross sales of Rs. 4809.1 Mn.