Brickwork Ratings downgrades the ratings and migrates the ratings to "Issuer not cooperating" for the Bank Loan Facilities of Rs. 100.00 Crs. of Lloyds Metals and Energy Ltd based on best available information, as the issuer did not cooperate.
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (07 Oct 2022) |
Present | ||
Fund Based | 100.00 | 100.00 | Long Term |
BWR BBB+ /Stable
Upgrade |
BWR BBB
/Stable ISSUER NOT COOPERATING* /Downgrade |
Grand Total | 100.00 | 100.00 | (Rupees One Hundred Crores Only) |
BWR has downgraded the long term rating to BWR BBB/Stable for the bank loan facilities of Lloyds Metals and Energy Ltd and migrated the ratings to be placed under the "Issuer Not Cooperating" category based on the available information as the issuer did not cooperate.
BWR had initially assigned a rating of BWR BBB-/Stable/ BWR A3 for the bank loan facilities as on 30 Jan 2019. On 26 May 2020, the ratings were reaffirmed at BWR BBB-/Stable/ BWR A3. On 19 Aug 2021, the long term ratings were upgraded at BWR BBB/Stable and the short term ratings were reaffirmed at BWR A3 and withdrawn. On 07 Oct, 2022, the ratings were upgraded to BWR BBB+/Stable.
Going forward, BWR tried to consistently contact the issuer to provide the required information over emails but no response has been received from the client. The company has requested for withdrawal of the ratings. Despite the best efforts of BWR to get at least the minimum required information for the review/withdrawal of the ratings, the company has not provided the same nor complied with the BWR withdrawal policy. In the absence of adequate information from the company/non compliance of BWR withdrawal policy, BWR is unable to assess the firm's financial performance and maintain a valid rating.
The lenders/investors may note to exercise due caution while using the above rating which mentions "Issuer Not Cooperating" since the rating lack any projections or forward looking component as it is arrived at based on the best available information without any management/banker's interaction.
LIMITATIONS OF THE RATING
Information availability risk is a key factor in the assessment of credit risk as generally, noncooperation by the rated entities to provide the required information for a review of the assigned rating may also be accompanied by financial stress. Users of the credit ratings should therefore take into account the possible deterioration in the credit quality of the rated entity arising from its non-transparency and withholding of information required for a review of the rating.
ABOUT THE ENTITYMacro Economic Indicator | Sector | Industry | Basic Industry |
---|---|---|---|
Commodities | Metals & Mining | Ferrous Metals | Sponge Iron |
Lloyds Metals and Energy Limited [Erstwhile Lloyds Metals & Engineer Limited] was initially incorporated as a private limited company under the name “Nagarjuna Metals and Engineer Private Limited” in the year 1977. Subsequently, in 1986 the constitution of the entity was converted into a public limited company and listed on the Bombay Stock Exchange in February 1987 however the name was changed to Lloyds Metals & Engineer Limited in January 1990 and to the latest name in April 2011. The Company is promoted by Mr. B. L. Agarwal & family along with TEMPL members holding around 74.63 percent; public shareholding stood at 25.09 percent and the non-promoter & Non-public group is 0.28 percent as on 31st March 2022. The day-to-day operations of the Company are handled by Mr. Babulal Agarwal who possesses more than five decades of experience in the iron & steel industry.
The company is engaged in the manufacturing of sponge iron and its by-products along generation/distribution of power. The by-products of the sponge iron include Char, Fly Ash, ESP Dust, Bed Material, and Iron Ore Fines. The company’s sponge iron plant is located in the Chandrapur district of Maharashtra with an installed capacity of 300000 MTPA and also the captive power plant with a 30 MW capacity which runs on the waste heat gasses produced in the sponge kiln. The Company possesses certifications including ISO - 9001, 14001, OHSAS 18001 ISO 9001:2008. Sponge iron is an intermediate product; a source of metallics for secondary steel making through Electric Arc Furnace (EAF) or Induction Furnace (IF) route. The sale of sponge iron contributed around 61 percent, iron ore contributed around 33 percent whereas power contributed around 6 percent to the total revenue for FY 2022. The main raw material required by the company is iron ore and non-coking coal. The iron ore is sourced from the iron ore mine located in Surjagarh village, Gadchiroli district Maharashtra which it has leased for a period of 50 years starting from 2007; the mining extraction activity commenced in October 2021. It also procures iron ore from other suppliers located in Raipur and Odisha. The company procures coal from Western Coalfields Limited under long-term linkages.
The company has only one associate under the name Thriveni Lloyds Mining Private Limited (TLMPL) effective from 28th May 2020 and has a 40 percent holding in it as on 31st March 2022.
Please refer to the following link for the previous detailed rationale that captures the Key Financials Drivers and their Description, Liquidity Position. Rating Sensitivities, Key Financial Indicators. View Previous Document
No outstanding ratings from other CRAs.
ANY OTHER INFORMATIONNil.
RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)Facilities | Current Rating (2024) | 2023 | 2022 | 2021 | |||||
---|---|---|---|---|---|---|---|---|---|
Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating |
Fund Based | LT | 100.00 |
BWR BBB/Stable
(ISSUER NOT COOPERATING* /Downgrade) |
NA |
NA
|
07Oct2022 |
BWR BBB+ Stable
(Upgrade) |
19Aug2021 |
BWR BBB Stable
(Upgrade) |
Non Fund Based | ST | 0.00 |
NA
|
NA |
NA
|
NA |
NA
|
19Aug2021 |
BWR A3
(Withdrawal) |
Grand Total | 100.00 | (Rupees One Hundred Crores Only) |
BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf. Investors queries can be sent to info@brickworkratings.com.
Hyperlink/Reference to applicable CriteriaAnalytical Contacts | |
---|---|
Vaishali Khandelwal Rating Analyst vaishali.k@brickworkratings.com |
V.K.Kukreja Associate Director - Ratings Board : +91 11 2341 2232 kukreja.vk@brickworkratings.com |
1-860-425-2742 | media@brickworkratings.com |
SL.No. | Name of the Bank/Lender | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) | |
---|---|---|---|---|---|---|
1 | Aditya Birla Finance Limited | Term LoanOut-standing | 19.20 | _ | 19.20 | |
2 | Citizen Credit Co-operative Bank | Cash CreditSanctioned | 10.00 | _ | 10.00 | |
3 | Citizen Credit Co-operative Bank | Term LoanOut-standing | 17.12 | _ | 17.12 | |
4 | Kotak Mahindra Bank | Term LoanOut-standing | _ | _ | 0.00 | |
5 | Others | Cash CreditProposed | 24.88 | _ | 24.88 | |
6 | TATA Capital Financial Services Limited | Term LoanOut-standing | 28.80 | _ | 28.80 | |
Total | 100.00 | 0.00 | 100.00 | |||
TOTAL (Rupees One Hundred Crores Only) |
The Rating Rationale is sent to you for the sole purpose of dissemination through your print, digital or electronic media. While it may be used by you acknowledging credit to BWR, please do not change the wordings in the rationale to avoid conveying a meaning different from what was intended by BWR. BWR alone has the sole right of sharing (both direct and indirect) its rationales for consideration or otherwise through any print or electronic or digital media.
About Brickwork RatingsBrickwork Ratings (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by Reserve Bank of India [RBI], offers credit ratings of Bank Loan, Non- convertible / convertible / partially convertible debentures and other capital market instruments and bonds, Commercial Paper, perpetual bonds, asset-backed and mortgage-backed securities, partial guarantees and other structured / credit enhanced debt instruments, Security Receipts, Securitization Products, Municipal Bonds, etc. BWR has rated over 11,560 medium and large corporates and financial institutions’ instruments. BWR has also rated NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations. BWR has Canara Bank, a leading public sector bank, as one of the promoters and strategic partner.
Disclaimer
Brickwork Ratings India Pvt. Ltd. (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by the Reserve Bank of India [RBI], offers credit ratings of Bank Loan facilities, Non- convertible / convertible / partially convertible debentures and other capital market instruments and bonds, Commercial Paper, perpetual bonds, asset-backed and mortgage-backed securities, partial guarantees and other structured / credit enhanced debt instruments, Security Receipts, Securitization Products, Municipal Bonds, etc. [ hereafter referred to as "Instruments"]. BWR also rates NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations.
BWR wishes to inform all persons who may come across Rating Rationales and Rating Reports provided by BWR that the ratings assigned by BWR are based on information obtained from the issuer of the instrument and other reliable sources, which in BWR's best judgment are considered reliable. The Rating Rationale / Rating Report & other rating communications are intended for the jurisdiction of India only. The reports should not be the sole or primary basis for any investment decision within the meaning of any law or regulation (including the laws and regulations applicable in Europe and also the USA).
BWR also wishes to inform that access or use of the said documents does not create a client relationship between the user and BWR.
The ratings assigned by BWR are only an expression of BWR's opinion on the entity / instrument and should not in any manner be construed as being a recommendation to either, purchase, hold or sell the instrument.
BWR also wishes to abundantly clarify that these ratings are not to be considered as an investment advice in any jurisdiction nor are they to be used as a basis for or as an alternative to independent financial advice and judgment obtained from the user's financial advisors. BWR shall not be liable to any losses incurred by the users of these Rating Rationales, Rating Reports or its contents. BWR reserves the right to vary, modify, suspend or withdraw the ratings at any time without assigning reasons for the same.
BWR's ratings reflect BWR's opinion on the day the ratings are published and are not reflective of factual circumstances that may have arisen on a later date. BWR is not obliged to update its opinion based on any public notification, in any form or format although BWR may disseminate its opinion and analysis when deemed fit.
Neither BWR nor its affiliates, third party providers, as well as the directors, officers, shareholders, employees or agents (collectively, "BWR Party") guarantee the accuracy, completeness or adequacy of the Ratings, and no BWR Party shall have any liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of any part of the Rating Rationales or Rating Reports. Each BWR Party disclaims all express or implied warranties, including, but not limited to, any warranties of merchantability, suitability or fitness for a particular purpose or use. In no event shall any BWR Party be liable to any one for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the Rating Rationales and/or Rating Reports even if advised of the possibility of such damages. However, BWR or its associates may have other commercial transactions with the company/entity. BWR and its affiliates do not act as a fiduciary.
BWR keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of the respective activity. As a result, certain business units of BWR may have information that is not available to other BWR business units. BWR has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.
BWR clarifies that it may have been paid a fee by the issuers or underwriters of the instruments, facilities, securities etc., or from obligors. BWR's public ratings and analysis are made available on its web site, www.brickworkratings.com. More detailed information may be provided for a fee. BWR's rating criteria are also generally made available without charge on BWR's website.
This disclaimer forms an integral part of the Ratings Rationales / Rating Reports or other press releases, advisories, communications issued by BWR and circulation of the ratings without this disclaimer is prohibited.
BWR is bound by the Code of Conduct for Credit Rating Agencies issued by the Securities and Exchange Board of India and is governed by the applicable regulations issued by the Securities and Exchange Board of India as amended from time to time.