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