Fitch Rates Melsta Regal Finance ‘A+(lka)’/Stable

Fitch Ratings-Colombo-21 May 2013: Fitch Ratings has assigned Sri Lanka-based Melsta Regal Finance Ltd (Melsta Regal) a National Long-Term rating of ‘A+(lka)’. The Outlook is Stable.

Melsta Regal’s rating reflects Fitch’s view that extraordinary support will be available from its ultimate parent, Distilleries Company of Sri Lanka PLC (DIST, AAA(lka)/Stable, 100% ownership) in case of need. This is based on its strong linkages with DIST and growing synergies with DIST group and related companies. Further details on DIST’s rating are available on www.fitchratings.com and www.fitchratings.lk. The four-notch difference between the ratings of DIST and Melsta Regal reflects the latter’s limited strategic importance to the DIST group at present.

Fitch will consider narrowing the notching-difference between the companies if Melsta Regal’s strategic importance to the DIST group were to increase - for example through greater synergies and common-creditor relationships.

Key linkages include DIST’s full ownership of and board representation at Melsta Regal, as well as its involvement in the strategic direction of the latter, through DIST’s 100%-owned investment holding company subsidiary Melstacorp Limited (ML).