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-Nekkanti Sea Foods' bank facilities receive BB+/PR4+ ratings by CARE.

BANKING AND CREDIT NEWS-March 2, 2011--Nekkanti Sea Foods' bank facilities receive BB+/PR4+ ratings by CARE(C)2011 M2 COMMUNICATIONS http://www.m2.com

2 March 2011 - India's CARE yesterday rated the long- and short-term bank facilities of Nekkanti Sea Foods Ltd at BB+ and PR4+, respectively.

The agency issued the following press release:

Ratings

Facilities/Instruments Amount (Rs. crore) Ratings Remarks

Long-term Bank Facilities 33.25 'CARE BB+' (Double B Plus) Assigned

Short-term Bank Facilities 3.00 'PR4+' (PR Four Plus) Assigned

Total Facilities 36.25

Rating Rationale

The rating is constrained by the relatively small size of operations, very low profitability, continuously declining sales, seasonal availability of raw material leading to high inventory levels and associated cost thereof, stiff competition from within India and other South East Asian countries, dependence on government policies and investments into unrelated ventures.

The rating is however underpinned by the experience and long track record of the promoters, location of the plant in aquaculture zone, approvals from Hazard Analysis Critical Control Point (HACCP), European Union (EU) and British Retail Consortium (BRC), and satisfactory capital structure. The ability of NSFL to improve sales and profitability margin and meet investment commitments in unrelated ventures without any deterioration in capital structure are the key rating sensitivities.

Company Profile

Nekkanti Sea Foods Limited (NSFL), promoted by Shri N S R Murthy, is engaged in manufacture of value added frozen Aqua & Sea food products -- Shrimp/Prawn varieties (Black Tiger, Sea Tiger, Sea Whites, PUD shrimps etc.) and various categories of Sea and fresh water fish in individually frozen and block frozen forms, through its frozen seafood processing plants at Visakhapatnam and Ravulapalem (near Rajahmundry).

NSFL has registered net sales of Rs 88.59 cr in FY10. Company has reported losses at the PBILDT level of Rs 1.56 cr and PAT of Rs 1.13 cr in FY10.

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Publication:M2 Banking & Credit News (BCN)
Date:Mar 2, 2011
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