The rating dropped to Caa3, which indicates the risk of default; BRL 7 billion debts plague company, with deteriorating cash and high interest rates
RIO – The agency of classification at risk Moody’s downgraded all the ratings assigned to the electric power company Light to “speculative grade and high credit risk”. Furthermore, he underlined a “bad outlook” for the company, which has a debt of R$7 billion.
Ratings have dropped from B3 to Caa3, indicating the risk that the company is insolvent in some way. Light’s debt exceeds R$7 billion. The company negotiated with creditors to avoid hastening the maturity of its debts.
“The downgrade of Light’s ratings to Caa3 follows management’s announcement that they are seeking to negotiate with creditors to agree to extend their debt in order to maintain liquidity for the company’s operational needs while maintaining concession and service quality a high priority,” Moody’s note said.
The market was already paying particular attention to the Carioca dealership From In late January, Light hired a consulting firm to improve its capital structure, amid the nervousness triggered by the Americanas crisis. But the company’s liquidity situation has worsened with high interest rates and tough launch conditions, the agency said.
“This announcement comes with fiscal 2022 results showing further deterioration in the company’s cash position high interest rates and difficult refinancing conditions,” the agency said. “The Caa3 rating implies high chances of default with an average recovery rate for creditors of between 65% and 80%.”
Source: Terra
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