S&P affirms ANI Technologies' 'B-' rating on sufficient liquidity

ANI Technologies Pte Ltd is scaling back its growth aspirations in loss-making segments to reduce capital requirements

Ola
(Photo: Bloomberg)
BS Reporter Mumbai
2 min read Last Updated : Aug 10 2022 | 12:18 PM IST
Rating agency Standard and Poor’s (S&P) has affirmed ANI Technologies Ltd’s (ANI Tech) “B-” speculative grade rating on adequate liquidity.The company, ANI Tech, is the operator of ride-hailing platform OLA Cabs.

India-based ANI Technologies Pte Ltd is scaling back its growth aspirations in loss-making segments to reduce capital requirements. At the same time, the company announced a liability management exercise targeting a buyback of $250 million of its guaranteed senior secured term loan--a move deemed to be opportunistic.

S&P said it expected ANI Tech to have sufficient liquidity for at least the next 24 months to bear operating losses until the company turns profitable. This is after a targeted buyback of its term loan.

The proposed cash tender offer will be a one-off transaction. That said, the buyback of the term loan in about nine months post issuance is unusual and could hit ANI Tech's capital market standing. This is notwithstanding the economic benefits of the transaction, mainly from reduced interest payments.

ANI Tech's pivot in strategy less than 12 months since its term loan B issuance raises risks related to its strategic planning. The company's capital structure will continue to face unhedged currency risk. This is because operations will remain concentrated in India, with a slower growth trajectory in its international mobility segments, S&P said.

ANI Tech's current intent to use its vehicle commerce business to market Ola Electric's two-wheelers rather than used cars also differs from previous expectation that the two entities would be run independently.

The outlook on the instrument is stable. B rating, a speculative grade, indicates the entity is more vulnerable to adverse business, financial and economic conditions, but currently has the capacity to meet financial commitments.

“We view ANI Tech's proposed cash tender offer as opportunistic rather than distressed, despite the potential for a below-par buyback,” the rating agency said.

S&P does not anticipate material risks of a conventional default in the absence of the transaction, given the company's adequate liquidity and limited debt maturities over the next 24 months.

The stable outlook reflects expectation that ANI Tech will have sufficient liquidity over the next 24 months to support its business improvement and growth strategies to achieve profitability by FY24. The outlook also incorporates the view that a potential failure to go public will not result in holders of compulsorily convertible preference shares (CCPS) exiting.

One subscription. Two world-class reads.

Already subscribed? Log in

Subscribe to read the full story →
Subscribe to Business Standard digital and get complimentary access to The New York Times

Quarterly Starter

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

Save 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories Online

  • Over 30 behind the paywall stories daily, handpicked by our editors for subscribers

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

Topics :OLA cabsS&P global RatingsLiquidityCompaniesOlaStandard and Poor'sTop 10 headlines

Next Story