jute mills rating report
TRANSCRIPT
-
7/29/2019 Jute Mills Rating report
1/2
Page 1 of 2 CRAB I C R A B Ra t i n g s o n C o r p o r a t e C r e d i t D i g e s t I 26 August 201 2
C REDIT RA T I N G REPORT
M i r z a Ju t e M i ll s Lt d
Pa r t i c u l a r s R a t i n g s
BDT 250 .0 mil lion aggregate Bai- Muajjall lim it BB1(Lr) Please see Appendi x 1for d etails BDT 39.3 mil lion Long Term Outstanding (LTO) BB1(Lr)
Lr- Loan Rating
D a t e o f R a ti n g : 27 December 20 11
Va l i d i t y : The ratings are valid up t o lim it exp iry date of r espective credit faciliti es or 31 December 2012 whichever
is earlier.
R a t i n g B a s e d o n : Bank liability posit ion as on 14 December 2011 and ot her relevant q uantitati ve as well as
qualitative information up to the date of rating declaration.
M e t h o d o l o g y : CRABs Corporate Rating Methodology (www.crab.com.bd)
A n a l y s t s :Sa j j ad - Bi n - Si r a j
M d . H u s s a i n u l Is l a m Sa j i b
PROFILE
Mirz a Jute Mil l Ltd. (hereinafter r eferred t o as MJML
or the Company) is a private limited company
incorporated on 13 April 2005. The production
facili ty is located at Fulbari, Dinajp ur. MJML produces
Gunny Bag and Twine of jute. The production
capacity is 8 Ton per day of either bag or twine. The
Company runs under the flagship of Mirza Group.
The businesses of Mirza grup is established in
Dinajpur region of Rajshahi division of Bangladesh.
The Group has 3 other concerns Mirza Woven Bag
(Pvt.) Ltd., Mirza Auto Rice Mills Ltd., and Noor Alam
EXIM Industries Ltd. run under t he leadership of Md.
Noor Alam and his son Md. Mizanur Rahman (Ripon).
RA T I O N A L E
Credit Rating Agency of Bangladesh Ltd. (CRAB) has
assigned BB1(Lr) rating to BDT 250.00 million Bai-
Muajjall limit and BDT 39.30 million Long Term
Outstanding (LTO) credit facilities availed by Mirza
Jute Mill s Ltd.
The rating takes into account the group strength of
Mirza Group with i ts presence in agro- based
businesses Rice mill, food grain crushing mill
(flour, pulse), and packaging producti on units- jut e
mill and polypropylene woven bags marketed in the
agro based economy of Dinajpur and other markets
of the country. The gradual rise of the group and
diversifying risk of business by engaging in different
type of business has also been considered in the
rating assigned.
MJML serves the regional m arket f or packagi ng ofagro products through its jute bags and twines
produced t hrough jut e spinning. MJML procur es raw
jute fr om local mark et and sell s it s pr oduce to
regional local market. The rating takes in to account
the stabilit y in p roduction and sales volume of MJML.
However unavailability of past data limits scope of
analyzing the gr owth att ained b y MJML over t he tim e.
The rating takes into consideration the demand for
the product in the regional agro- based market where
MJML operates. The increase in establi shment of
auto rice mills as well as other agro products would
keep the demand for the product intact indicating a
prospective business opportunity in future.
The assigned ratings are highly constrained due to
unavailability of past audited financials and absence
of proper books of accounts which could aid in
quantitative analysis of the financial performance of
the Company; absence of which eventually limits the
scope of assessing the credit worthiness of the
entity. As a result CRAB abstains from assigning
entity rating. However, the bank loan ratings are
assigned considering the nature of the industry in
which the Company operates, terms and conditions
of the loan facilities, banking transaction and
relation with bank.
The rating draws comfort from the succession
planning of the business and the successors vision
of setting up a corporate structure; although at
present the business though being a company
registered under the Registr ar of Join t Stock
Companies lacks adequate record keeping for
operational and financial references.
Jute
CRAB
Rating
Report
-
7/29/2019 Jute Mills Rating report
2/2
Mirza Jute Mil ls Ltd.
Page 2 of 2 www.crab.com.bd; www.crabrating.com
L O N G - T E RM R A T I N G : L O A N S / F A C IL IT I ES FR O M BA N K S / F IS
(All loans/ facilit ies wit h origi nal matur ity exceeding one year)
R A T I N G S D EF I N I T I O N
A A A ( L r )
( T r i p le A )
H i g h e s t S a f e t y
Loans/ facilities r ated A A A ( L r ) are judged to offer the highest degree of safety, with regard to timely payment of
financial obligations. Any adverse changes in circumstances are unlikely to affect the payments on the loan facility.
A A ( L r )*
( D o u b l e A )
H i g h S a f e t y
Loans/ facilities rated A A ( L r ) are judged to offer a high degree of safety, with regard to timely payment of financial
obligations. They differ only m arginally in safety from AAA (Lr) rated facilities.
A (Lr)
A d e q u a t e S a f e t y
Loan/ facilities rated A ( L r ) are judged to of fer an adequate degree of safety, with regard t o ti mely payment of financial
obligations. However, changes in circumstances can adversely affect such issues more than those in the higher rating
categories.
BBB (Lr)
( T r i p l e B )
M o d e r a t e S a f e t y
Loans/ facilities rated BBB (Lr) are judged to offer moderate safety, with regard to timely payment of financial
obligations for the present; however, changing circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal than f or issues in higher ratin g categories.
BB (Lr)
( D o u b l e B ) In a d e q u a t e
Sa f e t y
Loans/ facilities rated BB (Lr) are judged to carry inadequate safety, with regard to timely payment of financial
obligations; they are less likely to default in the immediate future than instruments in lower rating categories, but an
adverse change in circumstances could lead to inadequate capacity to make payment on financial obligations.
B (Lr)
H i g h R i s k
Loans/ facilities rated B (Lr) are judged to have high risk of default; while currently financial obligations are met,
adverse business or economic conditions would lead to lack of ability or willingness to pay interest or pr incipal.
C C C ( L r )
Ve ry H i g h R i s k
Loans/ facilities rated C C C ( L r ) are judged to have factors present that make them very highly vulnerable to default;
timely payment of financial obligations is possible only if favorable circumstances continue.
C C ( L r )
E x t r e m e l y H i g h R i sk
Loans/ facilities r ated C C ( L r ) are judged to be extremely vulnerable to default; t imely payment of financial obligations
is possible only through external support.
C (Lr)
N e a r t o D e f a u l t
Loans/ facilities rated C ( L r ) are currently highly vulnerable to non- payment, having obligations with payment
arrearages allowed by the terms of the documents, or obligations that are subject of a bankruptcy petition or similar
action but have not experienced a payment default. C is typically in default, with little prospect for recovery of
principal or interest. C (Lr) are typically in default, with litt le prospect f or recovery of principal or interest.
D ( L r )
D e f a u l tLoans/ facilities r ated D ( Lr ) are in default or are expected to default on scheduled payment dates.
* N o te : CRAB appends numerical modifiers 1, 2, and 3 to each generic rating classification from AA through CCC. The modifier 1 indicates that the
obligation ranks in th e higher end of its generic rating category; the modifier 2 indicates a mid- range ranking; and the modifier 3 indicates a ranking in
the lower end of t hat generic rating category.SH O R T - T ER M C R ED I T RA T I N G : LO A N S/ F A C I L IT I ES O F BA N K S/ F I S
(All loans/ facilities with original maturity within one year)
D EF I N I T I O N
ST - 1
Highest GradeThis rating indicates that the degree of safety regarding timely payment on t he loans/ facilities is very strong.
ST - 2
High Grade
This rating indicates that t he degree of safety regarding tim ely payment on th e loans/ facilities is strong; however, t he
relative degree of safety is lower t han that for issues rated higher.
ST - 3
Adequate Grade
This rating ind icates that t he degree of safety regardin g tim ely payment o n the loans/ facilit ies is adequate; however, the
issues are more vulnerable to the adverse effects of changing circumstances than issues rated in the two higher
categories.
ST - 4
Marginal
This rating indicates that the degree of safety regarding tim ely payment on t he loans/ facilities is marginal; and the
issues are quite vulnerable to the adverse effects of changing circumstances.
ST - 5
Inadequate Grade
This rating indicates that t he degree of safety regarding timely payment on t he loans/ facilities is minimal, and it is likely
to be adversely affected by short- term adversity or less favorable condit ions.
ST - 6
Lowest GradeThis rating indicates that t he loans/ facilities are expected t o be in default on m aturity or is in default.
Co pyrigh t 2 008, CREDIT RATING AGENCY OF BANGLADESH LIMITED ("CRAB"). All righ ts r eserved. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF
SUCH IN FORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR
SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANSWHATSOEVER, BY ANY PERSON WITHOUT CRABS PRIOR WRITTEN CONSENT.
All inf ormation contained herein is obtained by CRAB from sources believed by it to b e accurate and reliable. Because of t he possibility of human or mechanical error as well as other factors,
however, such information is provided as is wit hout warranty of any kind and CRAB, in particular, makes no representation or warranty, express or implied, as to the accuracy, t imeliness,
completeness, merchantability or fitness for any particular purpose of any such information. Under no circumstances shall CRAB have any liability to any person or entity for (a) any loss or
damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of CRAB or any of
its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such
informat ion, or (b) any direct, indir ect, special, consequential, compensatory or incidental damages whatsoever (including without limitat ion, lost p rofits), even if CRAB is advised in advance
of the possibility of such damages, resulting from the use of or inability to use, any such information. The credit ratings and financial reporting analysis observations, if any, constituting
part of the inform ation contained herein are, and must be construed solely as, statements of opi nion and not statements of fact or recommendations to purchase, sell or hold any securities.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITN ESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER
OPINION OR INFORMATION IS GIVEN OR MADE BY CRAB IN ANY FORM OR MANNER WHATSOEVER. Each rat ing or o ther opi nion mu st be weighed solely as one fact or i n any in vestm ent
decision made by or on behalf of any user of the information contained herein, and each such user must accordingly make its own study and evaluation of each security and of each issuer
and guarantor of, and each provider of credit support f or, each security that i t may consider purchasing, holding or selling.