Monday, Jun 04, 2007
MARC has lifted CNLT (Far East) Berhad’s (CNLT) RM60.0 million bank guaranteed Commercial Papers/Medium Term Notes Issuance Programme (CP/MTN) MARCWatch developing placement and reaffirmed its ratings at MARC-1(bg)/A(bg). CNLT’s ratings had been placed on MARCWatch Developing on 27 April 2007 following a revision in repayment terms of the said programme.
Detailed discussions with CNLT’s management revealed that the rescheduling of debt was necessary to allow the company sufficient time to address working capital constraints in order to increase capacity utilisation and ultimately, sales. The company has also reviewed its sales strategy and now aims to focus on the domestic market and reduce dependence on exports. Going forward, the company’s operations in Senegal are expected to show positive contributions.
However, MARC remains concerned about CNLT’s ability to implement its turnaround plans quickly enough to stem further erosion of its competitive position and its credit profile. The company will be challenged to meets its financial covenants under the CP/MTN programmes.
Detailed discussions with CNLT’s management revealed that the rescheduling of debt was necessary to allow the company sufficient time to address working capital constraints in order to increase capacity utilisation and ultimately, sales. The company has also reviewed its sales strategy and now aims to focus on the domestic market and reduce dependence on exports. Going forward, the company’s operations in Senegal are expected to show positive contributions.
However, MARC remains concerned about CNLT’s ability to implement its turnaround plans quickly enough to stem further erosion of its competitive position and its credit profile. The company will be challenged to meets its financial covenants under the CP/MTN programmes.