Finance Rating

Sri Lankan President Maithripala Sirisena (L) and Sri Lankan Prime Minister Ranil Wickremasinghe gesture as Sri Lankan Finance Minister Ravi Karunanayake (unseen) presents a supplementary budget to parliament, marking the first economic policy statement of the new government which came to power earlier in the month in Colombo on January 29, 2015. Sri Lanka's new government announced hefty taxes on top companies in a bid to raise revenue, accusing the previous regime of fudging the figures and leaving the economy in a "sad state". AFP PHOTO / Ishara S. KODIKARA (Photo credit should read Ishara S.KODIKARA/AFP/Getty Images)

Sept 10, 2007 (LBO) – Lanka Rating Agency (LRA) has lowered the outlook of Ceylinco Investments and Realty’s (CIR) long-term BB1 rating from stable to negative. . “The ratings reflect the Company’s weakening asset quality, frail financial performance and low capitalization,” LRA said.

“The negative outlook is premised on LRA’s concerns about the escalating interest-rate-environment, which could adversely affect the asset quality and demand for real-estate projects.”

The agency had confirmed the underlying BB1 long-term speculative rating and NP short-term ratings.

LRA said CIR derives franchise as a member of Ceylinco Consolidated and it is reflected by its deposit base, which stood at 1.88 billion rupees as at end-December 2006.

But, as it lacks the branch network to effectively compete in the loan based products, the company depends on property-related business.

CIR’s fortunes depended mainly on a joint venture with a related company to construct a shopping and apartment complex in Nawala and a holiday-villa housing scheme in Belidoowa, a part of Ruskin island in Panadura.

The Nawala project is expecged to h