EROS: Care downgrades credit ratings; board offers buyback

Eros International announces a share buyback program of around US$ 20 million of outstanding common shares, even as rating agency CARE downgrades the company's loan facilities.

Eros International engaged in the business of acquiring, distributing and co-producing Indian films across varied available formats like cinema, television and digital new media.

Credit rating of Eros International's long-term loan facilities was downgraded by rating company CARE. The reason stated for this downgrade was default in servicing of bank loans for the month of April and May. Eros said the company did not default any debt payments and the company has a strong financial standing with a good liquidity profile, in a clarification issued to the exchanges. The management of the company is discussing with the rating company to revise and restore the credit rating.

Owing to this issue, the market has reasons to believes that the move to repurchase shares must be to payoff the debts. But the management of the company states this program is only to create more strong cash financial standing for the company to expand business opportunities.

The stock of the company was last seen trading at Rs. 42 per share, which is 7.59 per cent down than its previous closing price. The stock's 52-week high is at Rs. 139.50 and 52-week low is at Rs. 41.35 per share.