Fitch rates Polyhose Rubber BB+(ind)

Fitch Ratings said it assigned Polyhose Rubber India Pvt. Ltd. a national long-term rating of BB+(ind), a national long-term rating of BB+(ind) to its term loans of Rs. 279.9 million and national ratings of BB+(ind)/F4(ind) to its fund-based working capital limits of Rs. 70 million and non-fund based working capital facilities of Rs. 35 million.

The ratings reflect Polyhose's market position of as a key supplier of rubber hoses to Caterpillar subsidiary Rapisarda Srl, Fitch said.

The ratings also reflect the involvement of Caterpillar as a joint venture partner providing both equity capital and technical assistance, along with the arrangement with Rapisarda for the worldwide distribution of products, the agency said.

The ratings are constrained by the company's small scale of operations, low levels of capacity utilization, steep decline in EBITDA margins during 2009 and delays in the completion of its capacity expansion project, Fitch said.

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