Fitch affirms Sai Sponge

Fitch Ratings said it affirmed Sai Sponge (India) Ltd.'s national long-term rating at BB-(ind).

The outlook is stable.

The affirmation reflects the agency's assessment of moderate operational and strategic linkages with parent company Super Smeltors Limits, along with the latter's financial performance over the year financial year ended March and fiscal 2010, which is in line with expectation, according to the agency.

Ratings also reflect Super Smeltors' unconditional and irrevocable guarantee to working capital facilities, the agency noted.

Ratings are constrained by the company's significant debt-funded capital expenditures for a new integrated steel plant, which is expected to weaken gross financial leverage from a total adjusted debt-to-EBITDA ratio of 5.9x in fiscal 2011, the agency said.

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