CARE Nepal assigns B+ and A4 rating to long term and short term bank facilities of Saakha Steel Industries

CARE Ratings Nepal Ltd. (CRNL) has assigned rating of „CARE-NP B+‟ to the long term bank facilities and „CARE-NP A4‟ to the short term bank facilities of Saakha Steel Industries Private Limited (SSIPL).

Key Rating Weaknesses

• Declining trend in sales and profitability during the last three years ended mid-July 2019 leading to negative cash accruals
• Leveraged capital structure and weak debt service coverage indicators
• Raw material price volatility risk and foreign exchange fluctuation risk
• Exposure to volatile interest rates
• Presence in highly fragmented and competitive nature of steel industry

Key Rating Strengths

• Established business group and experienced promoter in the related field
• Demand of steels products in the country
• Locational advantage

About the Company

Saakha Steel Industries Private Limited (SSIPL) is a private limited company established in 1997 in Simara, Bara district of Nepal. The company manufactures TMT Steel Bars of different sizes under the brand name “Saakha TMT”. In addition to production line of TMT bars, SSIPL also produces variety of steel wires and rods. The installed capacity of SSIPL is 72,000 Metric Tons Per Annum for TMT.   

Brief Financial Performance during the last 3 years is as follows:

(Rs in Million)

*Unaudited

Details of the Facilities rated

Source: https://careratingsnepal.com/