By Neelam Agrawal

India Ratings and Research (Ind-Ra) has assigned the USD41m fund-based working capital facilities guaranteed by Firestar International Private Limited (FIPL, ‘IND A-’/Stable/‘IND A2+’) and availed by Firestar Diamond BVBA (FDBVBA) ‘IND A-(SO)’/‘IND A2+(SO)’ rating . The Outlook on the long-term rating is Stable. The rating is according to the national credit rating symbols and definitions prescribed by Securities and Exchange Board of India.

KEY RATING DRIVERS

The rating is based solely on the unconditional and irrevocable guarantee provided by FDBVBA’s ultimate parent company FIPL for the former’s working capital facilities. FIPL’s ratings are based on a consolidated view of its businesses and financials. 

For the guarantor’s rating rationale, please click here.



RATING SENSITIVITIES

Negative: A rating downgrade of the guarantor could be negative for the bank loan ratings. 

Positive:
A rating upgrade of the guarantor could be positive for the bank loan ratings.

The revocation of the corporate guarantee would warrant a review of the ratings.


COMPANY PROFILE

FDBVBA is 99% held by Firestar Holding Limited (Hong Kong) which is a 100% subsidiary of FIPL. Established in 2009, BVBA is engaged in the polishing and trading of rough, cut and polished diamonds and is based in Antwerp (Belgium). In FY15, FDBVBA reported revenue of USD219.56m (up 9% yoy) and stable EBITDA of 2%. Its EBITDA/net interest coverage declined marginally to 2x in FY15 (FY14: 2.24x) and adjusted net debt/EBITDA weakened to 7.73x (6.75x). For 9MFY16, the company posted an operating EBITDA interest cover of 2.15x and net debt/EBITDA of 6.94x. For 9MFY16, FDBVBA working capital cycle improved to 106 days (FYE15: 111 days, FY14: 100 days), as the company curbed its inventory stock to offset the increase in receivable cycle. Its average of the maximum fund-based utilisation for the 12 months ended December 2015 was 97%.



SOLICITATION DISCLOSURES

Additional information is available at www.indiaratings.co.in. The ratings above were solicited by, or on behalf of, the issuer, and therefore, India Ratings has been compensated for the provision of the ratings. 

Ratings are not a recommendation or suggestion, directly or indirectly, to you or any other person, to buy, sell, make or hold any investment, loan or security or to undertake any investment strategy with respect to any investment, loan or security or any issuer. 

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Applicable Criteria

Analyst Names

  • Primary Analyst

    Neelam Agrawal

    Analyst
    India Ratings and Research Pvt Ltd Wockhardt Towers, 4th Floor, West Wing, Bandra Kurla Complex, Bandra East,Mumbai - 400051
    +91 22 40356115

    Media Relation

    Mihir Mukherjee

    Manager Corporate Communications and Investor Relations
    +91 22 40356121