The FINANCIAL -- Chennai/Singapore-26
September 2011: Fitch ratings has assigned Ogene Systems India Private
Limited a National Long-Term rating of 'Fitch B+(ind)'.
The Outlook is Stable.
The ratings reflect Ogene's limited track record of operations and intense competition in India's active pharmaceutical Ingredient (API) industry. The ratings are however supported by the company's strong pipeline of partly government-funded non-infringing processes and other chemical products, as well as by the proven technology acumen of its promoters.
Negative rating action may result if Ogene's financial leverage (gross debt/EBITDA) is sustained at levels above 6.0x. Conversely, positive rating action may result if its gross debt/EBITDA is sustained at levels below 4.0x.
Hyderabad-based Ogene commenced operations in 2005. It derives most of its revenue from API production and is currently working on 17 new non-infringing processes. Ogene acquired Indian Chemphar Limited's 125kl manufacturing plant in 2007 and upgraded the same to a 200kl. Due to a fire breakout in 2010, Ogene operated only in Q4 of FY11 and reported revenue of INR147.4m (FY10: INR185.3m), an operating EBITDA of INR21.9m (INR15.1m), an EBITDA margin of 14.9% (8.1%). Consequently, its debt/EBITDA was 22.8x in FY11 (FY10: 4.2x).
Ogene's facilities have also been assigned ratings as follows:
- INR144.2m term loan: 'Fitch B+(ind)'
- INR106.8m term loan: 'Fitch B+(ind)'
- INR75m fund-based working capital limits: 'Fitch B+(ind)'/'Fitch A4(ind)'
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