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CRISIL keeps ratings of Aero Club.

BANKING AND CREDIT NEWS-20 July 2010-CRISIL keeps ratings of Aero Club(C)1994-2010 M2 COMMUNICATIONS

20 July 2010 - Indian credit rating agency CRISIL confirmed yesterday the ratings of A- with a "stable" outlook and of P2+ on the bank facilities of local footwear maker Aero Club.

For arriving at its ratings, CRISIL has combined the business and financial risk profiles of Aero Club, Earthline Apparels Pvt Ltd, Bora Knitwear Pvt Ltd, and Indo Apparels Pvt Ltd (Indo). This is because the four entities collectively referred to as the Aero group, are in the similar lines of business, and have common promoters.

The ratings continue to reflect the Aero groupA[cent sign]a'[not sign]a"[cent sign]s established brand image, diversified product portfolio, healthy operating margin and strong distribution network. These rating strengths are partially offset by Aero ClubA[cent sign]a'[not sign]a"[cent sign]s exposure to risks related to intense competition in the footwear industry.

CRISIL believes that the Aero groupA[cent sign]a'[not sign]a"[cent sign]s revenues will increase over the medium-term, backed by the diverse distribution channels and established brand image. The agency may revise the outlook to "positive" if the Aero group achieves more than expected growth in operating income and enhances its profitability, while stabilising the newly added capacity and operations at its planned retail stores over the medium term. Conversely, it may revise it to "negative" if the partners draw more than expected capital from Aero Club to support the operations in other group entities and/or if the group undertakes more-than-expected debt funded capital expenditure leading to deterioration in capital structure.

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Publication:M2 Banking & Credit News (BCN)
Date:Jul 20, 2010
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