Zee Media: CARE downgrades credit rating

The stock of Zee Media was trailing by more than 3 per cent on Tuesday following an announcement that the company's Managing Director resigned and a downgrade of its credit ratings.

CARE Ratings Limited has reviewed its ratings for Zee Media's bank facilities, the company informed the exchanges on Tuesday. Zee Media's Long-term Bank Facilities - Term Loan of Rs. 113.20 crore and Long-term Bank Facilities - Cash Credit of Rs. 100 crore have been revised to CARE BBB Stable from the earlier CARE A. The ratings agency has, however, removed credit watch with negative implications. The company's Short-term Bank Facilities - Bank Guarantee of Rs. 38.00 crore has received CAREA3+ a downgrade from CARE A1.

Stating the rationale for the credit rating revision, CARE has cited that 'removal of support of Essel group built into the ratings due to the weakened financial flexibility at Essel group level and weakening of capital structure and liquidity position of the Zee Media at the consolidated level.' However, the rating continue to derive strength from the track record of the promoter group and the growth in income and profitability of the company.

The company's Managing Director, Ashok Venkatramani resigned from his position to pursue interest outside the company with effect from July 9, 2019.

On Tuesday, the stock of Zee Media Corporation closed at Rs. 12.35 per share, down by 3.52 per cent on BSE.