July 11, 2012

Mumbai

Sumeet Industries Limited

Ratings suspended

Total Bank Loan Facilities Rated	Rs. 2310 Million
Long-Term Rating	Suspended
Short-Term Rating	Suspended

(Refer to Annexure 1 for Facility-wise details)

CRISIL has suspended its rating on the bank facilities of Sumeet Industries Limited (Sumeet). The suspension of ratings is on account of non-cooperation by Sumeet with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, Sumeet is yet to provide adequate information to enable CRISIL to assess Sumeet’s ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL views information availability risk as a key credit factor in its rating process and views 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

Sumeet, promoted by Mr. Shankarlal Somani in 1989, is based in Surat, Gujarat. The company started as a producer of polypropylene multifilament yarn (PPMFY) and gradually expanded its capacity. In 2004-05, it diversified into production of polyester fabric and POY. PPMFY and POY were the company’s core business. It procured all the raw material from the local market. The company commissioned its Continuous Poly-condensation (CP) unit in July 2009, thereby adding around 100,000 tonnes capacity. Also, additional lines to produce around 48,300 tonnes of POY/Fully Drawn Yarn (FDY) were commissioned in March 2010. Sumeet plans to add more lines to enhance the capacity of POY/FDY by 44,000 tonnes by 2011-12, in order to synchronise its polyethylene teraphthalate chips (PET) and POY lines. The company, through this integration process, intends to generate more revenues from its FDY division over the medium term.

Annexure 1 - Details of various bank facilities

Current facilities			Previous facilities
Facility	Amount (Rs. Million)	Rating	Facility	Amount (Rs. Million)	Rating
Cash Credit	510.0	Suspended	Cash Credit	510.0	CRISIL BBB-/Stable
Letter of Credit	750.0	Suspended	Letter of Credit	750.0	CRISIL A3
Long-Term Loan	103.2	Suspended	Term Loan	1050.0	CRISIL BBB-/Stable
Foreign Currency Term Loan	946.8	Suspended	--	0	--

Media Contacts	Analytical Contacts	CRISIL Rating Desk
Mitu Samar Director, Communications and Brand Management CRISIL Limited Tel: +91-22- 3342 1838 E-mail: mitu.samar@crisil.com Tanuja Abhinandan Communications and Brand Management CRISIL Limited Tel: +91-22- 3342 1818 Email: tanuja.abhinandan@crisil.com	Subodh K Rai Senior Director - CRISIL Ratings Tel: +91-0124-672 2000 Email: subodh.rai@crisil.com	Tel: +91-22-3342 3047/3342 3064 Email:CRISILratingdesk@crisil.com

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Last updated: April 30, 2012

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