-
7/29/2019 Crisil.docx
1/3
March 12, 2013Mumbai
Mrs.Bectors Food Specialities Limited
Rated Amount Enhanced
Total Bank Loan Facilities Rated Rs.1700 Million (Enhanced from
Rs.1420 Milli
Long-Term Rating CRISIL A-/Stable (Reaffirmed)
Short-Term Rating CRISIL A2+ (Reaffirmed)
(Refer to Annexure 1 for details on facilities)
CRISILs ratings on the bank facilities of Mrs.Bectors Food
Specialities Ltd (Bector) continue to reflectBectors growing market
presence with the Cremica brand of biscuits in North India, its
strong financialprofile marked by a healthy capital structure and
debt protection metrics, and its established relationshiwith large
players such as McDonalds Corporation (McDonalds), ITC Ltd (ITC),
Cafe Coffee Day (a divisiAmalgamated Bean Coffee Trading Company
Ltd.), Dominos India ( a Jubilant FoodWorks Ltd. companyand others.
These rating strengths are partially offset by Bectors modest scale
of operations in the intecompetitive biscuit industry, and
susceptibility to increase in raw material prices and volatility in
foreignexchange rates, given that more than 20 per cent of its
revenues are from exports.
Bector received private equity funding of Rs.720 million from
Goldman Sachs Private Equity (Goldman Sin 2006-07 (refers to
financial year, April 1 to March 31), of which Rs.520 million was
against compulsoconvertible preference shares (class A shares), and
Rs.200 million against optionally convertible prefereshares (class
B shares). In September 2010, Goldman Sachs sold its 22 per cent
stake, in the form of clshares to IL&FS Trust Company Ltd
(acting trustee for Business Excellence Trust-India Business
Excelle
Fund) and India Business Excellence Fund-1, two Motilal Oswal
companies; the Class B shares wereconverted into equity. Bector is
now planning to induct a new investor to take over the stake held
by thtwo companies.
Bector is also considering the hiving off of its food
supplements division into a separate company whichthe case prior to
the equity investment. Both these changes are likely to be
completed in 2013-14, andeffect on Bectors credit risk profile will
be a key rating sensitivity factor.
Outlook: StableCRISIL believes that Bector will maintain a
steady revenue growth over the medium term, supported bystrong
brands, Cremica and Mrs. Bectors. Its financial risk profile will
also remain strong as the plannedcapital expenditure (capex) will
be funded through a prudent mix of internal accruals and debt. The
outlmay be revised to Positive if Bector reports a significant
improvement in its operating income andprofitability, while
maintaining its healthy capital structure. Conversely, the outlook
may be revised to
Negative if Bectors capital structure deteriorates, most likely
driven by larger-than-expected debt-funcapex, or if the proposed
business and shareholder restructuring has a detrimental impact on
its creditprofile.
About the CompanyMrs. Rajni Bector set up Bector as a joint
venture (JV) with Quaker Oats, USA (now a subsidiary of PepsInc) to
supply packaged ketchup to McDonalds in addition to buns, batter,
and bread. Quaker Oats withfrom the JV in 1999; however, Bector
continues to be the sole supplier of buns, packaged ketchup,
andcondiments to McDonalds. In 2006-07, Bector bought over the
assets of group company Cremica AgroLtd, which was engaged in
manufacturing biscuits and buns, in a slump sale. Since then,
Bector has beemanufacturing and marketing biscuits, breads, sauces,
spreads, salty snacks (namkeens), and ready-tocurries for both
institutional and retail clients under the Cremica brand. Bector
derives about 80 per cenits revenues from its biscuit and bakery
division while food supplements (sauces, spreads, and namkeeaccount
for the remainder.
Bectors customers include the Indian Army (biscuits), Indian
Railways (biscuits, packaged sauce), WorlFood Programme (biscuits),
Jet Airways, Taj Hotels, and Caf Coffee Day. The company also has a
long
-
7/29/2019 Crisil.docx
2/3
agreement with ITC and Mondelez International Inc (formerly part
of Kraft Foods Inc) for contractmanufacturing biscuits. It also
supplies bread and other bakery products to retailers under the
Englishbrand.
Bector reported a profit after tax (PAT) and operating income of
Rs.169.6 million and Rs.5.6 billion,respectively, for 2011-12, as
against a PAT of Rs.71.5 million on an operating income of Rs.4.7
billion f2010-11.
Annexure 1 Details of various bank facilities
Current facilities Previous facilities
FacilityAmount
(Mln)Rating Facility
Amount(Mln)
Rating
Bill Discounting 150 CRISIL A2+Bill Purchase-Discounting
Facility225
CRISIL/Stable
Cash Credit 530CRISIL A-/Stable
Cash Credit 442.5CRISIL/Stable
Corporate Loan 75CRISIL A-
/Stable
Letter of credit &
Bank Guarantee
155 CRISIL A
Letter of credit &Bank Guarantee
247.5 CRISIL A2+Proposed Term
Loan252.1
CRISIL/Stable
Standby Line ofCredit
30CRISIL A-/Stable
Standby Line ofCredit
20CRISIL/Stable
Term Loan 667.5CRISIL A-/Stable
Term Loan 325.4CRISIL/Stable
Total 1700 -- Total 1420 --
Media Contacts Analytical Contacts Customer Service Helpde
Mitu Samar
Director, Communications and BrandManagementCRISIL LimitedTel:
+91-22- 3342 1838E-mail: [email protected]
Tanuja AbhinandanCommunications and BrandManagementCRISIL
LimitedTel: +91-22- 3342 1818Email:[email protected]
Nagarajan Narasimhan
Senior Director - CRISIL RatingsTel: +91-22-3342
3536Email:[email protected]
Sridhar CDirector - CRISIL RatingsTel: +91-22-3342
3546Email:[email protected]
Timings: 10.00 am to 7.00 p
Toll free number: 1800 267 1Email:CRISILratingdesk@crisil
Note:This rating rationale is transmitted to you for the sole
purpose of dissemination through your newspaper /magazine / agency.
The rating rationale may be used by you in full or in part without
changing the meaning ocontext thereof but with due credit to
CRISIL. However, CRISIL alone has the sole right of distribution of
itsrationales for consideration or otherwise through any media
including websites, portals etc.
Crisil complexity levels are assigned to various types of
financial instruments. The crisil complexit
levels are available on
www.crisil.com/complexity-levels.investors are advised to refer to
the criscomplexity levels for instruments that they desire to
invest in. Investors may also call the CustoService Helpdesk with
queries on specific instruments.
About CRISIL LIMITEDCRISIL is a global analytical company
providing ratings, research, and risk and policy advisory services.
WeIndia's leading ratings agency. We are also the foremost provider
of high-end research to the world's largest
http://www.crisil.com/complexity-levelshttp://www.crisil.com/complexity-levels
-
7/29/2019 Crisil.docx
3/3
banks and leading corporations.
About CRISIL RatingsCRISIL Ratings is India's leading rating
agency. We pioneered the concept of credit rating in India in
1987.tradition of independence, analytical rigour and innovation,
we have a leadership position. We have rated ov50,000 entities, by
far the largest number in India. We are a full-service rating
agency. We rate the entire ra
of debt instruments: bank loans, certificates of deposit,
commercial paper, non-convertible debentures, bankhybrid capital
instruments, asset-backed securities, mortgage-backed securities,
perpetual bonds, and partiaguarantees. CRISIL sets the standards in
every aspect of the credit rating business. We have instituted
severinnovations in India including rating municipal bonds,
partially guaranteed instruments and microfinanceinstitutions. We
pioneered a globally unique and affordable rating service for Small
and Medium Enterprises(SMEs).This has significantly expanded the
market for ratings and is improving SMEs' access to
affordablefinance. We have an active outreach programme with
issuers, investors and regulators to maintain a high
levtransparency regarding our rating criteria and to disseminate
our analytical insights and knowledge.
CRISIL PRIVACY NOTICECRISIL respects your privacy. We use your
contact information, such as your name, address, and email id,
tfulfill your request and service your account and to provide you
with additional information from CRISIL andother parts of The
McGraw-Hill Companies, Inc. you may find of interest.For further
information, or to let us know your preferences with respect to
receiving marketing materials, plevisit www.crisil.com/privacy. You
can view McGraw-Hill's Customer Privacy Policy at
http://www.mcgraw-
hill.com/site/tools/privacy/privacy_english.Last updated: April
30, 2012
Disclaimer: A CRISIL rating reflects CRISIL's current opinion on
the likelihood of timely payment of theobligations under the rated
instrument and does not constitute an audit of the rated entity by
CRISIL. CRISIratings are based on information provided by the
issuer or obtained by CRISIL from sources it considers reliaCRISIL
does not guarantee the completeness or accuracy of the information
on which the rating is based. ACRISIL rating is not a
recommendation to buy, sell, or hold the rated instrument; it does
not comment on th
market price or suitability for a particular investor. All
CRISIL ratings are under surveillance. Ratings are revias and when
circumstances so warrant. CRISIL is not responsible for any errors
and especially states that itno financial liability whatsoever to
the subscribers / users / transmitters / distributors of this
product. CRISIL
Ratings rating criteria are available without charge to the
public on the CRISIL web site, www.crisil.com. Forlatest rating
information on any instrument of any company rated by CRISIL,
please contact CRISIL RATINGDESK at [email protected], or
at (+91 22) 3342 3000.
March 12, 2013 http://www.crisi
Stay Connected | CRISIL Website |Twitter
|LinkedIn
|YouTube
|Faceboo
http://www.crisil.com/index.jsphttp://www.crisil.com/index.jsphttp://twitter.com/CRISILLimitedhttp://twitter.com/CRISILLimitedhttp://twitter.com/CRISILLimitedhttp://www.linkedin.com/groups/CRISIL-Corporate-Group-100623?gid=100623http://www.linkedin.com/groups/CRISIL-Corporate-Group-100623?gid=100623http://www.linkedin.com/groups/CRISIL-Corporate-Group-100623?gid=100623http://www.youtube.com/user/CRISILLimitedhttp://www.youtube.com/user/CRISILLimitedhttp://www.youtube.com/user/CRISILLimitedhttp://www.facebook.com/CRISILLimitedhttp://www.facebook.com/CRISILLimitedhttp://www.youtube.com/user/CRISILLimitedhttp://www.linkedin.com/groups/CRISIL-Corporate-Group-100623?gid=100623http://twitter.com/CRISILLimitedhttp://www.youtube.com/user/CRISILLimitedhttp://www.linkedin.com/groups/CRISIL-Corporate-Group-100623?gid=100623http://twitter.com/CRISILLimitedhttp://www.youtube.com/user/CRISILLimitedhttp://www.linkedin.com/groups/CRISIL-Corporate-Group-100623?gid=100623http://twitter.com/CRISILLimitedhttp://www.youtube.com/user/CRISILLimitedhttp://www.linkedin.com/groups/CRISIL-Corporate-Group-100623?gid=100623http://twitter.com/CRISILLimitedhttp://www.facebook.com/CRISILLimitedhttp://www.youtube.com/user/CRISILLimitedhttp://www.linkedin.com/groups/CRISIL-Corporate-Group-100623?gid=100623http://twitter.com/CRISILLimitedhttp://www.crisil.com/index.jsp
