Ind-Ra places Prime Focus long-term issuer rating of 'IND BBB' on Rating Watch Positive; stock ends higher

4 Mar 2022 , 03:51 PM

Indian Ratings and Research (Ind-Ra), the credit rating agency has placed Prime Focus Limited’s (PFL) long-term issuer rating of IND BBB’ on Rating Watch Positive (RWP). The Outlook is “Stable”.

The rating on the Standby letter of credit (LC) Rs1,085 million has been withdrawn (paid in full). For fund-based working capital limits Rs320 million IND BBB/RWP/IND A2/ RWP, placed on RWP.

Prime Focus Ltd stock trade on Friday ended at Rs74.55 per piece up by Rs0.85 or 1.15% from its previous closing of Rs73.70 per piece on the BSE.

“Ind-Ra continues to take a consolidated view of PFL and its principal subsidiaries, including Prime Focus Technologies Limited (PFT; IND BBB’/Stable) and DNEG India Media Services Limited (DNEG India; ‘IND BBB’/Stable), on account of the strong legal, operational and strategic linkages among them. At FYE21, PFL held about 73.8% stake in PFT and 71.3% stake in DNEG India.

The RWP reflects a meaningful development on balance sheet deleveraging by PFL,” company shared Ind-Ra’s rating rationale.

In January 2022, Prime Focus World NV. (PFW), a subsidiary of PFL, entered into a definitive business combination agreement with Sports Ventures Acquisition Corp. (SVAC, a Nasdaq-listed special purpose acquisition vehicle (Nasdaq: AKIC)), which will result in substantial deleveraging at the consolidated level and PFW becoming a public listed company on the Nasdaq. The transaction is subject to various approvals and is likely to conclude by May 2022.

PFL’s underlying credit profile is supported by revenue visibility, backed by a healthy orderbook and recovery in profitability, resulting from the cost-optimisation measures implemented by the company.