Investors who lent Athi River Mining (ARM)money may be left with losses after ratings agency predicted the cement maker will continue defaulting on its obligation.
South African agency, Global Credit Ratings downgraded ARM on Friday last week to default status of DD over both its long-term and short-term loans.
The rating outlook implies that the form has defaulted on all obligations, or is likely to default on all or substantially all of its obligations as they fall due, thus failing to meet all or substantially all scheduled principal and/or Interest payments.
“Global Credit Ratings has downgraded the national scale debt ratings for Athi River Mining Cement Limited to DD(KE) in both the long term and short term. Concurrently the Commercial Paper rating has been downgraded to DD(KE). The downgrades follow GCR’s observation that ARM has defaulted on scheduled interest payments,” GCR said.
GCR notes that there are several initiatives underway to stabilize ARM’s financial position and help it return to profitability. The rating may be rebased once the proposed refinancing transactions are completed and all past-due debt obligations, as well as penalties, are settled in full or appropriately restructured.