Shoe Bonds

Dec 06 (LBO) – A holding company that controls Sri Lanka’s largest footwear maker DSI, is to issue a 300 million rupee debenture which has been rated BBB+ (lka), Fitch Ratings Lanka said Wednesday. Fitch says the company DSI Holdings which also has a national long term rating of BBB+ may increase the size of the debenture issue to 500 million rupees.

A BBB+ is an investment grade rating with ratings below BB+ being considered speculative.

“The issue proceeds will be primarily utilised to replace some of its existing short-term borrowings,” Fitch said.

“Management recently increased its committed bank credit lines by 500 million rupees to back-up liquidity, and expects further enhancements of around 200 million rupees in the near-term.”

As at end of the first half of 2007, DSI Holdings had total debt of 1958 million rupees, of which 87 percent was short-term working capital related loan facilities.

Fitch says DSI Holdings is the country’s largest manufacture and retailer of footwear in terms of value, volume and points of presence.

It is a fully-owned subsidiary of the D Samson Group (Pvt) Limited, and was formed in July 2006 as part of the group’s strategy to seek eq