ICRA has reaffirmed ‘D’ rating assigned to Yash Papers’ (YPL) Rs 77.39 crore term loans, Rs 17 crore fund based limits and Rs 0.51 crore proposed limits. The credit rating agency has also reaffirmed ‘D’ rating assigned to company’s Rs 4 crore non-fund based limits.
The rating takes into account the stretched liquidity position of the company, levered capital structure (gearing of 2.27 times as on March 2011), weak debt coverage indicators (Debt service coverage ratio of less than 1 time as on March 2011) and continued delays in debt servicing following the inadequate cash accruals of the company arising out of low capacity utilization and inadequate contribution to profits from its poster paper unit.
While the company’s operating profitability has improved during 2010-11 on account of improved volumes and realizations, cash accruals during this period continues to remain below satisfactory levels due to high depreciation and interest burden. Nevertheless, the rating continues to derive comfort from the long operating history of the company and fully integrated scale of operations.
| Company Name | CMP |
|---|---|
| JK Paper | 367.75 |
| TN Newsprints | 140.20 |
| West Coast Paper | 486.90 |
| Emami Paper Mills | 73.07 |
| Seshasayee Paper | 267.90 |
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