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-ICRA sets rating of TC Terrytex's long-term bank facilities at B+.

M2 EQUITYBITES-October 10, 2011--ICRA sets rating of TC Terrytex's long-term bank facilities at B+(C)2011 M2 COMMUNICATIONS http://www.m2.com

10 October 2011 - ICRA rated on Friday at B+ the INR590m (USD12m/EUR8.9m) long-term loan, INR450m long-term fund-based limits and INR30m long-term non-fund based limits of Indian textile products maker TC Terrytex Ltd (TCTL).

The agency also gave an A4 rating to its short-term non-fund based limits of INR110m.

The ratings are based on recent delays in the firm's debt servicing, the high working capital intensity of operations and negative operational cash flows. Meanwhile, TCTL's leveraged capital structure and moderate profitability levels have resulted in modest debt coverage indicators.

ICRA also took into consideration the company's integrated operations, geographically diversified exports, the extensive experience of its promoters and their financial support.

Future ratings on TCTL will depend on its ability to maintain its profitability despite the volatile yarn prices, adverse currency effects and weak demand outlook in its major markets. Its ability to improve liquidity through efficient management of working capital and timely debt servicing will also be taken into account.

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Publication:M2 EquityBites (EQB)
Date:Oct 10, 2011
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