Bank loan

Brickwork reaffirms the ratings of Kallam Textiles’ bank credit facilities

Brickwork Ratings Reaffirms “BWR D” Rating for Bank Loan Facilities of Rs369.74cr from Kallam Textiles Ltd (formerly Kallam Spinning Mills Ltd)

The reaffirmation of the rating continues to reflect the delay in meeting debt obligations, i.e. the repayment of the principal amount of TL with one of the lenders and, therefore, the classification of the account being SMA-1, as confirmed by the lender.

Additionally, BWR notes corporate governance issues as reflected in the recent dismissal of the Company Secretary and the Company’s Chief Compliance Officer with effect from August 7, 2021 due to a breach of the code. conduct, fraud, breach of employment contract, professional misconduct and unauthorized misconduct. resignation filing with BSE Ltd & MCA.

BWR is also aware of the late submission of the Declaration of No Default (NDS) by the company to Brickwork Ratings (BWR) on August 06, 2021. The NDS submitted by the company declares the default on principal repayment of the term loans, as indicated in its press release of August 06, 2021.

Ratings continue to take into account the seasonality associated with cotton availability, high working capital intensive operations, tight liquidity and exposure to currency risks. The company’s revenue sensitivity to textile demand conditions and commodity price volatility continues to constrain ratings.

The ratings, however, continue to draw on the experience of promoters in the textile industry, integrated operations (ginning, spinning, weaving, dyeing), the company’s long experience and established relationships with customers and Suppliers.

At around 12:08 p.m., Kallam Textiles was trading at Rs 15 each, down Rs 0.1 or 0.66% on Sensex.

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