Rating agencies downgrade DP World as parent struggles

NOTWITHSTANDING Dubai World's assurances that its DP World unit is beyond the reach of its creditors, rating agencies have downgraded the subsidiary's debt fearing the sickly parent's US$59 billion debt will bring on creditor demands to sell whatever the parent I things go sour in the present crisis.

Now India's credit rating agency Icra has downgraded the ratings assigned to bank facilities of DP World's three subsidiaries engaged in container cargo operations in India, reports India's Financial Chronicle.

This follows Moody's and Standard & Poor's recent moves to downgrade the debt of DP World, together with the debt of various Dubai government related entities including Jebel Ali Free Zone (JAFZ), following the shocking announcement of Dubai World's restructuring.

Moody's downgraded DP World's debt rating from A3 to Baa2 while S&P downgraded its ratings from BBB+ to BBB- on negative CreditWatch.

While India's Icra has downgraded ratings to the term loans of Chennai Container Terminal (CCT) and Nhava Sheva International Container Terminal, it has placed the ratings of loans to three container terminals, Chennai, Nhava Sheva and Mundra, under "watch with negative implications" category, signalling the beginning of impact of Dubai crisis in India.

Zim quarterly loss at US$208 million, volume falls 31pc

ISRAEL Corp, Zim's parent company, has suffered a third quarter year-on-year net loss of US$208 million, bringing the year-to-date loss for the first nine months to $513 million compared to a net loss of $132 million in the same period of 2008.

The company has made losses for the last eight quarters, with no signs of a turn-around. Third quarter revenue fell 50 per cent to $596 million against the $1,187 million in sales over the same time a year ago.

Zim continued to lose market share as third quarter throughput fell 31 per cent 455,000 TEU from 660,000 TEU the year before, reported Paris-based AXS Alphaliner.

Zim's cumulative losses almost wiped out its capital base, with shareholder equity severely depleted at $180 million as at the end of September. Zim is also in default on its current debt payments and has a working capital deficit of $2,097 million as of September.

Zim has launched a share sale, which will see Israel Corp inject $450 million into the company. The amount of $200 million represents existing loans, which Zim has converted into equity as well as additional injection of $250 million in new cash.

(Source: www.schednet.com)