Brickworks downgrades Dredging Corporation free bond issue worth Rs58.88 crore

Dredging Corporation of India Limited has informed that Brickwork Ratings has downgraded the rating with a revised outlook for the company’s ongoing Rs58.88 crore tax-free bond issue.

Brickworks has revised the rating to “BWR A+” with a negative outlook.

BWR lowered its ratings due to persistently low margins with frequent losses over the past three years, less than expected improvement in profitability over the past two years and frequent short-term liquidity constraints due to the company’s inability to generate sufficient cash flow from operations to cover its operating expenses on time.

However, the rating is backed by the company’s track record of over four decades, significant and continued market dominance in dredging operations in India, consistent operational revenue over the years, modest backlog position, good financial structure and stable prospects for the industry.

The company’s outlook has been revised from “stable” to “negative”, due to the company’s intermittent liquidity problems.