Hayleys PLC is preparing to raise 5.0 billion rupees of debt through a debenture issue, but the exact targets are not immediately clear, although the group has significant debt, some of which may need to be refinanced.
Hayleys, one of the most diversified conglomerates in the country, performed extremely well for the year ended March 2021 and for the nine months ended December 2021, as its subsidiaries generated strong performances, in particular those which generated export income, which resulted in higher dividend income for the holding. business.
As of December 31, 2021, Hayleys had total outstanding debt of Rs 25.5 billion, but leverage and standalone interest coverage improved to 20.73 times and 2.33 times each from 5.06 times a year ago and 0.46 times in March 2020 respectively.
ICRA Lanka this week assigned an AA- rating to the proposed instrument with a stable outlook given the “strong operational links between group entities and the high degree of control that the holding company exercises over the dividend streams of the subsidiaries”.
The rating agency also appreciated the group’s “experienced management team, solid professional structure and good corporate governance practices as key positives, which complemented its
strengths of the company”.
However, “the ratings include the holding company’s relatively high level of stand-alone debt as planned asset monetizations have been delayed due to unfavorable economic conditions.
Additionally, the deteriorating financial profile of the group’s leisure sector remains a challenge from a ratings perspective,” they added.
Halyeys plans to sell some of its non-core assets to raise around 10 billion rupees in cash, but the austere macro environment appears to have derailed the plans.
However, the group’s revenue increased by 42% in the last fiscal quarter ended December 31, 2021 to reach 92.2 billion rupees, while profits jumped by 67% to reach 4.53 billion rupees or 6 .04 rupees per share over the same one-year period. since.
Hayelys stock closed at Rs.98.40, adding Rs.1.40 or 1.44% on Wednesday.
CIFAR Lanka is confident that the group will continue to improve in the current fiscal year.