(The following statement was released by the rating agency)
Apr 05 - Fitch Ratings has assigned India-based New Tech Steel & Alloys Private Limited (NSAPL) a National Long-Term rating of 'Fitch D(ind)'. A list of additional rating actions is provided at the end of this commentary.
The ratings reflect NSAPL's defaults on term loan repayments, since October 2011 and amounting to INR7m, along with overutilisation of its working capital limits by more than 1% over the period of August 2011 to January 2012. This is a result of the company's stretched liquidity position due to the lack of adequate working capital funds. In FY11 (financial year ending March), cash and bank balances were INR0.3m.
The ratings may be upgraded if interest and principal obligations are serviced on a timely basis for two consecutive quarters, along with no irregularities in the bank limits.
NSAPL manufactures MS ingots and TMT bars at a combined installed capacity of 66,000MTPA. Its registered office and manufacturing unit are located at Khatkhati in Assam. NSAPL commenced its commercial operations in July 2010. The present management acquired the company in May 2011.
Fitch has also assigned ratings to NSAPL's bank loans, as follows:
- INR104.2m long-term loan: 'Fitch D(ind)'
- INR63.39m fund-based limits: 'Fitch D(ind)'