Fitch rates Sree Astalaxmi loans BB-(ind)

Fitch Ratings said it assigned Sree Astalaxmi Spinning Mills Pvt Ltd. a national long-term rating of BB-(ind), along with a BB-(ind) rating on its Rs. 50 million fund-based working capital limits, F4(ind) rating on its Rs. 7.5 million non-fund based working capital limits and BB-(ind) rating on its Rs. 155.6 million term loans.

The outlook is stable.

The ratings are constrained by Sree Astalaxmi's increasing leverage due to an increase in capital expenditure for the ongoing capacity expansion by 10,032 spindles, Fitch said.

Its debt-to-EBIDTA ratio was 4.5x in 2009 and is likely to go up further in 2011 due to the increasing capital expenditure, the agency said.

The ratings also are constrained by the inherent risk of operating in a commodity market characterized by the volatility in raw material prices coupled with competitive pressures on pricing in the yarn market, Fitch added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.