Rated Footwear

Nov 24, 2006 (LBO) – An old-established family footwear company from the deep south of Sri Lanka, has published its credit rating, before entering the country’s debt markets through a debenture issue.

The group’s origins dates back to the 1930’s and have interests in information technology, power generation and food processing.

The holding company of Sri Lanka’s top footwear maker DSI, has earned a BBB+ investment grade rating, Fitch Ratings Lanka said Thursday.

By end of the financial year 2006, DSI Holdings had 1758 million rupees in debt up from 1,424 million in 2005, and 85 percent of this was taken up with working capital.

The company had 63 million as cash reserves and 92 million in unutilised credit facilities.

The firm was negotiating additional back-up credit, and was planning to issue long-term debentures to replace some of its short-term loans to improve liquidity, Fitch said.

DSI Holdings (DSIHL), a newly incorporated company, was rated on the track record of its operating units, Fitch said.

“DSIHL’s rating takes into consideration its position as Sri Lanka’s largest manufacturer and retailer of footwear in terms of volume, value and size