-CRISIL revises down outlook on Elite Homes.
BANKING AND CREDIT NEWS-November 19, 2010--CRISIL revises down outlook on Elite Homes(C)2010 M2 COMMUNICATIONS http://www.m2.com
19 November 2010 - CRISIL on Thursday changed the outlook on the long-term bank facility of Elite Homes Pvt Ltd to "negative" from "stable".
The agency issued the following press release:
Rs.730.5 Million Term Loan* B/Negative (Reaffirmed; Outlook Revised from 'Stable')
*Including a proposed limit of Rs.0.5 million
CRISIL has revised its rating outlook on the long-term bank facility of Elite Homes Pvt Ltd (EHPL) to 'Negative' from 'Stable', while reaffirming the rating at 'B'.
The outlook revision reflects CRISIL's belief that the company's continued stretched liquidity is likely to impact its debt repayment ability over the near to medium term. The outlook revision also reflects time and cost overruns in EHPL's 'M2K County Heights' project and increased pressure on the company's liquidity because of delays in receipt of customer advances.
The rating continues to reflect EHPL's exposure to risks related to slow recovery of demand in the real estate sector, implementation of its M2K County Heights residential project, and cyclicality inherent in the Indian real estate industry. These weaknesses are partially offset by the company's promoters' experience in the construction industry.
CRISIL believes that EHPL's liquidity will remain under pressure over the medium term because of very slow inflow of customer advances for its residential project, M2K County Heights. The rating may be downgraded if customer advances level does not improve, leading to more-than-expected time and cost overruns in the project. The rating may also be downgraded if EHPL fails to service its term loans in a timely manner because of increased pressure on liquidity. Conversely, the outlook may be revised to 'Stable' if the company's sales from M2K County Heights increase, leading to increase in revenues.
About the Company
Set up in March 2005, EHPL is part of the M2K group. EHPL is currently executing a group housing project, M2K County Heights, in Dharuhera (Haryana). Apart from the M2K County Heights project, the company also has plans to develop an integrated township at Dharuhera over the medium term.
In 2009-10 (refers to financial year, April1 to March 31) EHPL's group entities, Saraf Synfab Pvt Ltd (SSPL), Symphony Electronics Pvt Ltd (SEPL), and Havenly Resorts Pvt Ltd (HRPL) were amalgamated with EHPL. These entities earlier jointly owned the land bank where EHPL planned to build an integrated township.
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