Rating Rationale Writer and Publisher Private Limited 9 February 2017 Brickwork Ratings assigns Rating for the Non-Convertible Debenture Issue of Rs244.80 Cr of Writer and Publisher Private Limited (WPPL) Particulars Amount (Rs. Crs) Tenor Rating Assigned* Rs244.80Cr (Rs. Two Hundred Forty Four Crore Eighty Lakhs Only ) Long Term *Please refer to BWR website www.brickworkratings.com/ for definition of the ratings (Outlook: ) Outstanding as follows Information about other outstanding ratings of the issuer with BWR is as follows Instrument Issue Date January 2016 Amount Coupon Maturity Date Rs285Cr 10.34% 30 th April 2019 ISIN Particulars INE861I08031 Rating* (Outlook ) June 2016 Rs200Cr 10.05% 30 th April 2019 INE312G08047 (Outlook ) * Please refer to BWR website www.brickworkratings.com/ for definition of the ratings 1 9 Feb 2017
Rationale/Description of Key Rating Drivers/Rating sensitivities: The rating takes into account, inter alia, the Company s strong promoters (Dainik Bhaskar or DB Group), the strength of underlying securities (collateralized shares of DB Corp Ltd.) which are listed, fundamentals of DBL, Structure of the proposed issue and availability of sufficient free shares of DB Corp Limited post this transaction. The rating is however constrained by unavailability of assured cash flows of the issuer at redemption, dependency on the group support or alternatively liquidation of the securities to meet the obligations arising from the proposed issue and low liquidity of the DB Corp Ltd s equity share. Structure WPPL proposes to raise R244.8Crores by issue of s with a tenor up to three years. The would be having bullet repayment at the time of maturity and interest is being served on a quarterly basis. The s would be secured by way of pledge of equity shares of DB Corp Ltd (Listed entity) owned by the Promoter of DB Corp Ltd and Promoter Group in proportion of cover of 1.50x. Additionally proposed s are having a cover of 0.35x of mortgage of the property held by promoter group. The Proceeds from the proposed issue will be utilized for repayment of existing outstanding and General Corporate Purpose. Issuer to fund the interest amount three days (T-3) prior to the interest payment date and maturity amount on thirty days (T-30) prior to maturity date in the designated account charged to debenture trustee. In the event of shortfall promoters shall ensure to fund shortfall in the designated account, interest amount three days (T-3) prior to the due date and maturity amount twenty five days (T-25) prior to due date. There is Put/call option at the end of six month and every three months thereafter. Rating Outlook: BWR believes the Writer and Publisher Private Limited business risk profile will be maintained over the medium term. The outlook indicates a low likelihood of rating change over the medium term. The given rating essentially captures performance of DBL, since WPPL currently does not strong operational cash flows and the structure involves pledge of DBL equity shares provided as security. Security cover of 1.50 times provides cushion to investors. T-30 days and T-3 days clause requiring the Company to deposit principal and interest amount respectively payable under the facility in the Designated Bank Account charged addresses the liquidity aspects to an extent should there is a need to invoke the security. Performance of DBL and other promoter companies, adherence to the structure are the key sensitivities to the Rating. The rating outlook may be revised to 'Negative' if the if the credit quality of DBL declines. 2 9 Feb 2017
Writer and Publisher Private Limited (WPPL) WPPL was initially incorporated as a Private Limited Company in 1981 and subsequently converted into a public limited company in 1987. The company belongs to the Dainik Bhaskar group and was engaged in printing and publishing of Hindi Daily News paper Dainik Bhaskar and Gujarati Daily News paper Divya Bhaskar upto 12/12/06. Since beginning, the company was also engaged in commercial printing on Job Work basis to the reputed groups like Times of India, HT Media Ltd., Benette Coloman Co. Ltd., Indian Express, Business Standard Ltd., Outlook Publishing Ltd., Maya Press (P) Ltd., Chanakya Publication, Diamond Magazines Pvt. Ltd. The company has given its Land & Building to D B Corp Ltd. on Rent. The company holds huge land bank and have rented the space to group companies and earns rent and lease income. Company Financial Performance For FY16, Income from operations stood at Rs155.94Cr with loss of Rs0.20Cr in FY16 again income form operation of Rs179.04Cr in FY15 and profit After Tax of Rs3.63Cr in FY15. Net Worth stood at Rs462.25Cr for FY16. DB Corp Limited (DBL) DBCL, one of the largest print media companies in India, started operations in 1958. The company commenced operations, with the launch of its first edition of Hindi daily newspaper in Bhopal, Madhya Pradesh. As on March 31, 2016 the company publishes seven daily newspapers with 62 editions and 208 sub-editions in four languages i.e. Hindi, Gujarati, English and Marathi across 14 states in India. DBCL s daily newspaper portfolio includes Dainik Bhaskar (DB), Divya Bhaskar, Saurashtra Samachar, DB Star, D, DB Post and Divya Marathi. Other than newspapers DBCL also publishes certain magazines & tabloids. DB also has radio licenses for 17 cities across 7 states, under brand name My FM. In addition, MY FM also acquired 13 new radio station licenses thereby expanding its footprint in 30 cities across markets The company has 52 printing units in the states of Rajasthan, Gujarat, Chandigarh, Punjab, Haryana, Himachal Pradesh, Madhya Pradesh, Chhattisgarh, Jharkhand, Maharashtra and Bihar. The closing price of DBL shares as on 6 th February, 2017 was at Rs375.90. The 52week high of DBL share price was at Rs447.85 and 52 week low of DBL share price was at Rs286.55. Total Operating Income (TOI) stood at Rs2051.86Cr with PAT of Rs296.64Cr in FY16 against TOI of Rs2009.57Cr with PAT of Rs316.34Cr. For 9M FY17, the company earned a PAT of Rs.310.57Cr on total income of Rs.1740.9Cr 3 9 Feb 2017
Rating History for the last three years (including withdrawn/suspended ratings) Sl No Instrument Current Rating ( 2017) Rating History Type (Long Term/Short Term) Amount (Rs Crs) Rating 2016 2015 2014 1 Long Term 244.80 2 Long Term 200.00 June 2016 BWR AA 3 Long Term 285.00 Jan 2016 4 Long Term 605.00 Withdrawn Hyperlink/Reference to applicable Criteria General Criteria Structured Obligation 4 9 Feb 2017
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