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-CRISIL gives B to Bengal United Credit Belani Housing.

M2 EQUITYBITES-November 10, 2010--CRISIL gives B to Bengal United Credit Belani Housing(C)2010 M2 COMMUNICATIONS

10 November 2010 - CRISIL said Tuesday it had assigned a B rating with a "stable" outlook to the cash credit facility of Bengal United Credit Belani Housing Ltd.

The agency issued the following press release:

Rs.200 Million Cash Credit B/Stable (Assigned)

CRISIL has assigned its 'B/Stable' rating to Bengal United Credit Belani Housing Ltd's (BUCBHL's) cash credit facility. The ratings reflect BUCBHL's weak financial risk profile, marked by a small net worth and limited financial flexibility (because of significant funding risks arising out of low saleability of its ongoing projects). These weaknesses are partially offset by good track record of Belani Group, of which BUCBHL is part, in executing real estate projects and association with West Bengal Housing Board (WBHB).

Outlook: Stable

CRISIL believes that BUCBHL's liquidity will remain weak over the medium term because of heavy dependence on sale of residential units to fund the ongoing project. The outlook may be revised to 'Positive' if there is considerable improvement in the sale of the ongoing project. Conversely, the outlook may be revised to 'Negative' if project execution is delayed.

About the Company

BUCBHL is an equal joint venture between WBHB and United Credit Belani Group (UCBG). BUCBHL has been set up to develop two residential projects, Hiland Wood and Hiland Willows, in Rajarhat, Kolkata. UCBG is an association between Kolkata-based Belani group, which is into real estate, and United Credit Ltd, which is a non-banking financial company. Hiland Wood has been constructed (a large portion of the project has been sold out), while Hiland Willows is under construction.

For 2009-10 (refers to financial year, April 1 to March 31), BUCBHL reported a net profit of Rs.36.45 million on a total income of Rs.1155 million, against a net profit of Rs.11.4 million on a total income of Rs.385.0 million for the previous year.

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Publication:M2 EquityBites (EQB)
Date:Nov 10, 2010
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