Asian Distributors Private Limited looking to obtain long term and short term bank facilities worth Rs.881.35 Million; Care Ratings grades the issue

CARE Ratings Nepal Limited (CRNL) has assigned rating of ‘CARE-NP BBB-’ to the long term bank facilities worth NPR 51.05 Million and ‘CARE-NP A3’ to the short term bank facilities worth NPR 830.30 Million of Asian Distributors Private Limited (ADP).

The ratings assigned to the bank facilities of ADP derives strength from long track record of operations with increasing scale, growth in profitability and moderate debt coverage indicators with low long term debt in FY18 (refers to 12 months period ended mid-July 2018). The ratings also factor in diversified distribution network, established brands, experienced promoters and management team in related field and liquidity profile of the company supported by liquid investments in listed shares.

The ratings are, however, constrained by working capital intensive nature of operations with high utilization levels, exposure to volatile interest rates and exposure to regulatory risk related to import duty. The rating also factors in foreign exchange fluctuation risk and fragmented nature of industry with competition from both domestic and international players. Ability to profitably scale up the operations and effective management of working capital will remain the key rating sensitivities.

Asian Distributors Private Limited (ADP) is a private company engaged in import/trading of major international food brands in Nepal since 1998. The operations of trading in FMCG products were earlier carried out in other entities which were later transferred to ADP after its registration as a private limited company on March 4, 2011. Currently, ADP is involved in supplying brands like Nivea, Streax, McVitie’s Biscuits, Complan, Nycil, Glucon D, Lindt, Olitalia Olive Oil etc, in Nepal.

Source: Care Ratings Nepal