Debt Restructuring Of India Cotton Textile Industry Is Imminent
According to local media in India recently,
Fitch Ratings organization
(Fitch Ratings) said that the cash loss of India's cotton textile industry is gradually affecting the debt repayment ability of India's manufacturing and fiber production enterprises, and debt restructuring is imminent.
The agency also said that although the debt restructuring plan adopted by the India government temporarily relieved the debt repayment pressure of the textile industry, it could not stop cotton.
Spin
The deterioration of the company's capital.
Many cotton textile companies are now heavily indebted.
It is reported that the loss of the textile industry is mainly due to the large fluctuation of the cotton market, which makes the profits of spinning and weaving and fiber products lower than in previous years, which has increased the burden of loan repayment.
It is estimated that India's textile industry has accumulated about 600 billion rupees, of which 75% comes from the spinning industry.
In addition, due to the higher cost of inventory goods in spinning and weaving industry, the profit margin before interest rate depreciation and amortization decreased significantly in India textile industry last year.
It is expected that the industry will resume its normal profit margin in the fourth quarter of 2012.
Fitch said that because of cash losses, textile enterprises mainly concentrated in commodities.
Stock
In recent years, the ability to repay loans has declined, resulting in the excessive use of liquid capital, resulting in many phenomena of default. Many enterprises can not fulfill the agreement on repayment of loans on time.
After the India textile industry reported a loss of turnover, India textile ministry asked India bank to extend the loan repayment period of the textile company.
But Fitch has doubts about extending the loan repayment period to all textile companies.
Fitch said that certain companies with solvency and imminent maturity of loans would also choose to extend loan repayment. Similar situations occurred during the 2008-2009 year financial crisis.
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