CRISIL has reaffirmed assigned bank loan ratings of ‘AA-/Stable/P1+’ to Gujarat Fluorochemicals Ltd’s (GFL’s) various bank facilities.
The ratings reflect the company’s strong cash accruals from carbon emission credits, comfortable financial risk profile, and expected synergies from integrated operations in the chemicals segment. These rating strengths are partially offset by GFL’s aggressive growth strategy and high implementation and counterparty risks associated with its windmill project.
Outlook :
Stable
CRISIL expects GFL to maintain its moderately-conservative capital structure backed by a phased implementation of its windmill project and strong cash accruals from the carbon credits business. The outlook may be revised to ‘Negative’ if GFL’s gearing increases to more than 1 time. Conversely, significant improvement in GFL’s business risk profile and gearing levels could result in a change in the outlook to ‘Positive’.
About GFL
GFL is India’s largest manufacturer of hydro chlorofluorocarbon (refrigerant gas), with an installed capacity of 25,000 tonnes per annum (tpa). It has also implemented a clean development mechanism (CDM) project, which effects reduction of greenhouse gases by thermal oxidation of hydro fluorocarbon 23 (HFC 23), and earns carbon emission reductions (CER) units. In 2007-08, GFL commissioned a 52,500-tpa caustic soda/chlorine plant, a 30 mega watt (MW) captive power plant, a 41,500-tpa chloromethane plant, and a 5500-tpa Poly-Tetra-Fluoro-Ethylene plant. It also has exposure to the film exhibition business through its subsidiary, Inox Leisure Ltd.
