Feb 11, 2010 (LBO) – Fitch Ratings said it has downgraded Sri Lanka’s Abans’ (ABL) National Long-term rating to ‘A-(lka)’ from ‘A(lka)’ with a stable outlook. The downgrade reflects weaknesses in its management information system (MIS), coupled with concerns regarding the quality and timeliness of information provided by the company to Fitch, the rating agency said in a statement.
These concerns come on the back of significant adjustments to management’s financial accounts by the company’s auditors – subsequent to a presentation to Fitch – which resulted in a significant deviation in ABL’s performance for the 12 month period to end-March 2009 (FYE09).
Fitch said it does note that ABL’s credit indicators were strong for the current rating level.
This was based on expected improved leverage through reduced debt levels, expected improvements of interest coverage and strong liquidity due to availability of sizable unused bank facilities of 1.3 billion rupees as at December 2009.
But Fitch said it was concerned by the significant delay in obtaining audited accounts for the ABL group and 172 million rupees reversals of sales at ABL giv