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CARE revises rating to ‘CARE AA-‘ to the long-term bank facilities of ABCIL

13 Jul 2011 Evaluate

Credit rating agency, CARE has revised the assigned rating to the long-term bank facilities of Aditya Birla Chemicals (India) (ABCIL). The agency has revised the ratings from ‘CARE AA’ to ‘CARE AA-‘ for Rs 197.80 crore. The agency has also reaffirmed the assigned ‘CARE A1+’ rating to the short-term bank facilities of the company for Rs 15.00 crore.

The revision in the rating follows ABCIL’s debt-funded takeover of the Chloro Chemicals Division (CCD) of Kanoria Chemicals and Industries (KCIL), the incremental investment required for enhancing the CCD’s production capacities, and the consequent deterioration in the ABCIL’s debt profile.

ABCIL’s ability to successfully integrate the operations of CCD with its own operations and derive effective synergies out of the combined operations as well as to maintain its profit margins in the cyclical chlor-alkali market are the key rating sensitivities.

ABCIL, part of Aditya birla Group and a subsidiary of Hindalco Industries have got experience in running similar business as well as integrated business they acquired. The company is engaged in the manufacture and sale of chlor-alkali products in India. Its products include caustic soda, liquid chlorine, hydrochloric acid, sodium hypochlorite, hydrogen gas, aluminum chloride, and bleaching powder.

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