- Partly convertible preference share - Rs. 20 crore Rating : CARE AAA (SO)
Credit Analysis & Research Ltd.(CARE) has assigned, "in principle", a CARE AAA(SO) [Triple A (Structured Obligation)] rating to the proposed Partly Convertible Preference Share (PCPS) issue of Hanuman Tea Company Ltd.(HTC) for Rs. 200 mn. The dividend payable on PCPS, issued at par, would be 11% p.a., payable annually. 72% of the PCPS issue i.e Rs. 144 mn would be converted into equity shares in the 17th month and the balance 28% (Rs. 56 mn) would be redeemed at the end of the 5th year from the date of allotment. The dividend payment on proposed PCPS issue and redemption of redeemable portion (Rs. 56 mn) of such PCPS issue shall be backed by an Indemnity cum Guarantee of GE Capital Services of India (GECSI).
HTC, promoted by Calcutta based Shri S.N. Bagla and Shri S.K. Bagla, has three tea estates located in Assam and West Bengal. HTC is mainly engaged in cultivation, manufacture and sale of tea. HTC has also diversified into power generation by setting up wind mills near Coimbatore. During FY'99, HTC earned a PBILDT of Rs. 70.8 mn on a total income of Rs. 142.2 mn. PBILDT margin at 49.7% during FY'99 was very high on account of low cost structure of its tea estates. PAT margin was also high at 29.9%. Overall gearing at 1.2 as on March 31, 1999 and interest coverage at 3.5 during FY'99 were satisfactory.
GECSI, a wholly owned subsidiary of General Electric Capital Corporation, USA (GECC), has grown in size rapidly over the past few years and is one of the largest NBFCs in the country. GECC belonging to the GE group of companies, USA has been one of the largest contributors to the bottomline of the group and is one of the world's largest finance companies. GECSI operates with a support mechanism in the form of a Keep Well Agreement from GECC wherein, interalia, GECC would provide funds as necessary to enable GECSI to make any payment on any debt obligation of GECSI.