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-CRISIL rates Akik Tiles' bank facilities at B.

BANKING AND CREDIT NEWS-September 10, 2010--CRISIL rates Akik Tiles' bank facilities at B(C)2010 M2 COMMUNICATIONS

10 September 2010 - India's credit rating agency CRISIL on Thursday said it has rated the bank facilities of Akik Tiles Ltd, part of the Swastik group, at B/negative.

The rating reflects the Swastik groupa[euro](tm)s below-average financial risk profile, marked by a high gearing and limited financial flexibility. These rating weaknesses are partially offset by Swastik groupa[euro](tm)s diversified product portfolio with increasing proportion of value-added products.

For arriving at its rating, CRISIL has combined the business and financial risk profiles of Akik, Gladder Ceramics, and Swastik Ceracon. This is because the three entities, collectively referred to herein as the Swastik group is in same line of business, under a common management, and have centralized business functions of finance, procurement of clay and marketing of tiles. Further all the three entities are likely to be merged in the near term.

CRISIL believes that the Swastik groupa[euro](tm)s liquidity will remain weak over the medium team as its net cash accruals are expected to remain low vis-A -vis its maturing term loan obligations. Also, the groupa[euro](tm)s gearing is expected to remain high because of large borrowings to meet capital expenditure and working capital requirements. The outlook may be revised to "stable" in case the group generates higher-than-expected net cash accruals over the medium term. Conversely, the rating may be downgraded in case of steeper-than-expected decline in the Swastik groupa[euro](tm)s profitability and deterioration in its financial risk profile.

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Publication:M2 Banking & Credit News (BCN)
Date:Sep 10, 2010
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