July 25, 2013

Mumbai

Scan Steels Limited

Ratings Suspended

Total Bank Loan Facilities Rated	Rs.1507.1 Million
Long-Term Rating	Suspended
Short-Term Rating	Suspended

(Refer to Annexure 1 for details on facilities)

CRISIL has suspended its ratings on the bank facilities of Scan Steels Limited (Scan Steels). The suspension of ratings is on account of non-cooperation by Scan Steels with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, Scan Steels is yet to provide adequate information to enable CRISIL to assess Scan Steels’s ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria ‘Information Availability Risk in Credit Ratings’.

About the Group

Scan Steels, the flagship company of the Scan group, was incorporated in December, 1990 as a private limited company and converted into a public limited company in March 1996. The company, promoted by Mr. Sawarmal Gadodia, is now managed by his sons Mr. Rajesh Gadodia and Mr. Nimish Gadodia. Scan Steel is an integrated steel producer with an installed capacity of 210,000 tonnes per annum (tpa) of sponge iron, 116,000 tpa of ingots/billets, captive thermal power plant of 12 megawatt (MW), and a rolling plant of 58,000 tpa. Scan Steel is setting up a 60,000 tpa sponge iron unit for Rs.350 million and a 10 MW power plant for Rs.600 million; 70 per cent of the cost will be funded by debt and the remainder will be funded by promoters’ contribution.

Annexure 1 – Details of various bank facilities

Current facilities			Previous facilities
Facility	Amount (Mln)	Rating	Facility	Amount (Mln)	Rating
Cash Credit	780	Suspended	Cash Credit	780	CRISIL B/Stable
Letter of Credit	200	Suspended	Letter of Credit	200	CRISIL A4
Term Loan	527.1	Suspended	Term Loan	527.1	CRISIL B/Stable
Total	1507.1	--	Total	1507.1	--

Media Contacts	Analytical Contacts	Customer Service Helpdesk
Tanuja Abhinandan Communications and Brand Management CRISIL Limited Tel: +91-22- 3342 1818 Mobile: +91- 98192 48980 Email:tanuja.abhinandan@crisil.com Jyoti Parmar Communications and Brand Management CRISIL Limited Tel: +91-22- 3342 1835 E-mail: jyoti.parmar@crisil.com	Vasudevan R Director - CRISIL Ratings Tel: +91-44-6656 3100 Email:vasudevan.r@crisil.com	Timings: 10.00 am to 7.00 pm Toll free number: 1800 267 1301 Email:CRISILratingdesk@crisil.com

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 or context thereof but with due credit to CRISIL. However, CRISIL alone has the sole right of distribution of its rationales for consideration or otherwise through any media including websites, portals etc.

Crisil complexity levels are assigned to various types of financial instruments. The crisil complexity levels are available on www.crisil.com/complexity-levels.investors are advised to refer to the crisil complexity levels for instruments that they desire to invest in. Investors may also call the Customer Service Helpdesk with queries on specific instruments.

About CRISIL LIMITED
CRISIL is a global analytical company providing ratings, research, and risk and policy advisory services. We are India's leading ratings agency. We are also the foremost provider of high-end research to the world's largest banks and leading corporations.

About CRISIL Ratings
CRISIL Ratings is India's leading rating agency. We pioneered the concept of credit rating in India in 1987. With a tradition of independence, analytical rigour and innovation, we have a leadership position. We have rated over 60,000 entities, by far the largest number in India. We are a full-service rating agency. We rate the entire range of debt instruments: bank loans, certificates of deposit, commercial paper, non-convertible debentures, bank hybrid capital instruments, asset-backed securities, mortgage-backed securities, perpetual bonds, and partial guarantees. CRISIL sets the standards in every aspect of the credit rating business. We have instituted several innovations in India including rating municipal bonds, partially guaranteed instruments and microfinance institutions. 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 affordable finance. We have an active outreach programme with issuers, investors and regulators to maintain a high level of transparency regarding our rating criteria and to disseminate our analytical insights and knowledge.

CRISIL PRIVACY NOTICE
CRISIL respects your privacy. We use your contact information, such as your name, address, and email id, to fulfil your request and service your account and to provide you with additional information from CRISIL and other parts of McGraw Hill Financial you may find of interest.
For further information, or to let us know your preferences with respect to receiving marketing materials, please visit www.crisil.com/privacy. You can view McGraw Hill Financial’s Customer Privacy Policy at http://www.mhfi.com/privacy.
Last updated: May, 2013

Disclaimer: A CRISIL rating reflects CRISIL's current opinion on the likelihood of timely payment of the obligations under the rated instrument and does not constitute an audit of the rated entity by CRISIL. CRISIL ratings are based on information provided by the issuer or obtained by CRISIL from sources it considers reliable. CRISIL does not guarantee the completeness or accuracy of the information on which the rating is based. A CRISIL rating is not a recommendation to buy, sell, or hold the rated instrument; it does not comment on the market price or suitability for a particular investor. All CRISIL ratings are under surveillance. Ratings are revised as and when circumstances so warrant. CRISIL is not responsible for any errors and especially states that it has no 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. For the latest rating information on any instrument of any company rated by CRISIL, please contact CRISIL RATING DESK at CRISILratingdesk@crisil.com, or at (+91 22) 3342 3000.


July 25, 2013	http://www.crisil.com