Fitch Ratings has downgraded the Long-Term Issuer Default Ratings on India-based paper maker Ballarpur Industries (BILT) and its subsidiary Bilt Paper B.V. to 'CCC', from 'B-' and maintained the ratings on Rating Watch Negative (RWN).

Fitch downgraded BILT and placed it on RWN on July 29, 2016, based on its deteriorating credit profile and significant refinancing risks for upcoming debt maturities. BILT said in July 2016 it was in talks to sell two of its Indian units, which would improve liquidity, but the company has not made material progress on the transaction. BILT's liquidity has worsened since our previous downgrade, and operations were curbed due to inadequate working capital, In addition, without an asset sale, there is greater risk it will not be able to address debt maturities, resulting in the downgrade to 'CCC'.

The company is aggressively pursuing several options to secure funding and monetise assets to meet its repayment obligations. The RWN reflects the risk that the company would have exhausted almost all possible remedies to avoid a debt default or restructuring if the current negotiations are delayed or fail. If BILT's latest efforts do not conclude favourably within six months, Fitch will take further negative rating action.

Shares of the company declined Rs 0.2, or 1.28%, to trade at Rs 15.45. The total volume of shares traded was 156,702 at the BSE (3.15 p.m., Tuesday).