October 25, 2013

Mumbai

LAXMI COTSPIN LIMITED

Ratings Suspended

Total Bank Loan Facilities Rated
Rs.377.5 Million
Long-Term Rating
Suspended
Short-Term Rating
Suspended

(Refer to Annexure 1 for details on facilities)

CRISIL has suspended its ratings on the bank facilities of LAXMI COTSPIN Ltd (LCSL). The suspension of ratings is on account of non-cooperation by LCSLwith CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, LCSL is yet to provide adequate information to enable CRISIL to assess LCSL’s ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria ‘Information Availability Risk in Credit Ratings’.

About the Company

LCSL is a joint venture (JV) between Rajuri Steel Pvt Ltd, Kalika Steel Alloys Pvt Ltd, and Gujarat Tea Traders Pvt Ltd. The JV was set up in 2005 as Mauli Cotspin Pvt Ltd; the name was changed to Laxmi Cotspin Pvt Ltd in 2007. In February 2011, the company was reconstituted as a closely held public limited company and its name was changed to the current one. LCSL has a ring spinning facility with 16,800 spindles (production capacity: 3 million kg per annum) and a ginning facility (production capacity: 33.5 million kg per annum). LCSL manufactures 100 per cent combed cotton warp and hosiery yarns in counts of 30s, 36s, and 40s. These yarns are used in the manufacturing of grey cloth and knitted fabric. The company has capacity utilisation of 80 per cent for its spinning unit and 35 per cent for its ginning unit.

Annexure 1 - Details of various bank facilities

Current facilities
Previous facilities
Facility
Amount
(Rs. Million)
Rating
Facility
Amount
(Rs. Million)
Rating
Bank Guarantee
30
Suspended
Bank Guarantee
30
CRISIL A4
Cash Credit
107.5
Suspended
Cash Credit
107.5
CRISIL B-/Stable
Term Loan
240
Suspended
Term Loan
240
CRISIL B-/Stable
Total
377.5
--
Total
377.5
--

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About CRISIL Ratings
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Last updated: May, 2013

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October 25, 2013

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