CARE gives BB+ to Bio Ethanol India's bank facilities

(ADPnews) - Sep 15, 2010 - Indian credit rating agency CARE said Tuesday it has assigned a BB+ rating to the bank facilities of Bio Ethanol India Ltd.

The rating is constrained by risk associated with the implementation of the ongoing project, absence of a firm marketing tie-up, volatility in raw material prices, sensitivity of the business to government regulations in respect of imposition of additional duties and/or restriction on usage of alcohol, intense competition with the presence of innumerable unorganized players and lack of experience of the main promoter in the similar line of business.

The rating also factors in strong technical arrangement for the project, financial closure, receipt of the requisite statutory clearances, progress of the project as on July 31, 2010 and favourable demand outlook. Implementation of the project without any time or cost over-run, stabilization of operation and the ability of BEIL to successfully market its product and reap benefit thereof are the key rating sensitivities.

Rating agency website: careratings.com

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