Dish TV India share price jumps 15 percent in the early trade on Monday after the company said the default in debt repayment was on account of a temporary cash shortfall due to peak payment commitments to suppliers.
?The Company?s deferral to service the loan amount is due to bunching of repayment obligations and utilization of funds for other business requirements including, both capital expenditure and payment of operating liabilities to broadcasters and suppliers,? Dish TV India said in a regulatory filing.
The company issued the statement after rating agency Care Ratings downgraded the rating of the company’s short-term bank facilities to ?CARE D? from ?CARE A4+?. The revision in the rating assigned takes into account default in payment of short-term loan due on November 28, 2019, CARE said.
?The company has debt of Rs 2,500 crore at current level and will be paying Rs 600 crore by March-end,? said Anil Dua, Group CEO.
There was transitional disruption with new regime, but it has settled now. The residual debt will be under Rs 2,000 crore, lower than total debt and most debt repayment will be done through internal accruals, he added.
The company will be making all payments due, including the delayed payment of Rs 250 crore, Anil Dua added.
?The financial profile stands weak on account of stretched liquidity position due to sizeable debt repayments in the near term and the company would continue to remain in the investment mode. In addition, impairment on goodwill as on March 31, 2019 has resulted in decline in reported net-worth?, it said.
The company expect revenue to be over Rs 6,000 crore and EBITDA to be over Rs 2,000 crore. The company has reported good synergies last year in manpower & operational costs and expect to realise more synergies on content cost.
However, Dish TV India, on Friday after market hours, said it has been drawing on its internal cash accruals to fund its capital expenditure for more than six quarters now.
Debt and interest payment obligations falling due after the particular incident of non-service have also been fulfilled on time.
While being cautious about its cash expenditures, the company also remains optimistic about improvement in its liquidity situation going forward, it said.
The Company is in touch with its banking partners and hopes to get alternate credit facilities to finance its regular capex so as to normalize the utilization of its cash flow towards debt repayment, it added.
Meanwhile, on Friday, the stock of Dish TV India had tanked 15 per cent to Rs 12.56 on the BSE after the company informed the exchanges that a lender had invoked 3.12 million pledged shares.
?On December 4, 2019, IDBI Trusteeship Services invoked 3.12 million equity shares representing 0.17 per cent of promoter holding pledge for collateral of loan,? the company said in a regulatory filing.
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