India Filmmaker Loses 32% in Value Over Two Days on Debt Worries
Eros International was the nation’s first media company to list on the New York Stock Exchange.
(Bloomberg) -- Eros International Media Ltd. plunged Friday, bringing its two-day slump to 32% after Care Ratings downgraded the company’s creditworthiness, citing delays or likely default in servicing of bank loans.
The filmmaker’s Indian-listed stock suffered a rapid erosion in market value this week after Care cut the long-term bank facilities rating 10 notches to D, or default from BBB-, a move that brought back memories of the steep downgrades last year at Infrastructure Leasing & Financial Services by Moody’s Corp.’s local unit.
Eros provided further clarification on Friday:
“As previously communicated through our Indian subsidiary, Eros International Media Ltd. was late on two loan interest payments for April and May 2019. These interest payments total less than $2 million and are currently in process of remittance," the U.S.-listed parent Eros International Plc said in a clarification to the exchanges.
The company’s downgrade came on the same day the Indian unit of S&P Global Inc. reduced Dewan Housing Finance Corp.’s rating to default after the mortgage lender missed debt payments. Dewan’s shares slumped 11% on Thursday.
India’s financial system has been facing cash woes since last year when multiple defaults by IL&FS forced the government to intervene and exposed weaknesses in the shadow banking sector. The funding crunch in the shadow banking sector has begun to weigh on the nation’s economic growth, which recently slowed to a five-year low.
Eros International, which acquires, co-produces and distributes Indian films, was the nation’s first media company to list on the New York Stock Exchange -- its ADRs crashed 49% Thursday. The Mumbai-listed stock has slumped 48% this year and traded at 45.50 rupees on Friday. It slid almost 56% in 2018.
--With assistance from Divya Balji and Candice Zachariahs.
To contact the reporter on this story: Nupur Acharya in Mumbai at nacharya7@bloomberg.net
To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Ravil Shirodkar
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