CRISIL places PVR rating on 'watch negative'

On Tuesday, rating agency, CRISIL placed its rating on the long-term bank facilities of PVR Limited on ‘rating watch with negative implications’ following the closure of multiple movie theatres across India post orders of state governments to contain the spread of Coronavirus.

According to the agency, the rating continues to reflect PVR’s strong market position, well-established brand, healthy operating efficiency and a significantly improved risk profile. CRISIL will remove the ratings from ‘watch’ and take a final rating action, once there is clarity on the resumption of operations.

PVR has been taking some proactive steps to reduce its cost and augment liquidity. Since leases are a major fixed cost for PVR, it has invoked the force majeure clause for lease agreements with mall developers. Hence, PVR expects no payment of leases during the closure. The company has also been looking to conserve cash by reducing the workforce, deferring maintenance and Capex outlay.

Currently, PVR has liquidity in excess of Rs 250 crore, which is likely to cover its curtailed operating cost as well as debt servicing for the next few months.

PVR Pictures Ltd provides film entertainment services. The Company offer services including film production, distribution and exhibition.

At 11.45 am on Tuesday, the stock was trading at Rs 1,240, up by 2.77 per cent or Rs 33.40 per share. The 52-week high is recorded at Rs 2,121 while its 52-week low is Rs 1,045.85 on BSE.