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Credit Rating Report

Particulars

Ratings

Petromax Refinery Ltd.

BBB3

BDT 1,310.0 Million Long-term Outstanding

BBB3 (Lr)

Outlook

Stable

Remarks
Details are at Appendix 1

Lr- Loan rating, ST- Short Term
Date of Rating: 22 December 2012
Validity: Entity rating is valid till 30 June 2013; loan ratings are valid up to limit expiry date of respective credit facilities or till 30
June 2013 whichever is earlier.
Rating based on bank liability position as on 26 May 2012 and other relevant quantitative as well as qualitative information up to
the date of rating declaration.

Analysts
Mir Arif Billah

RATIONALE

Credit Rating Agency of Bangladesh Ltd. (CRAB) has

mab@crab.com.bd

Project Finance\Petroleum

Petromax Refinery Ltd.

assigned BBB3 (pronounced triple B three) to
Md. Abdur Rahman Evan

Petromax Refinery Ltd. CRAB has also assigned

evan@crabrating.com

BBBB3 (Lr) rating to BDT 1,310.0 million long-term
loan to Petromax Refinery Ltd.

Table 1: Cost of the project
Value

Percent

Petromax Refinery Ltd. is a private limited company

Land and Land Development

41.8

1.3%

incorporated in 2008. The projected outputs have

Building and Civil Engineering

259.6

7.8%

treatment capacity of 2,500 barrel of natural gas

Imported Machinery

2,173.6

65.6%

Local Machinery

130.0

3.9%

Erection and Installation

165.0

5.0%

Furniture, Fixture and Equipment

7.0

0.2%

valuable co‐product of natural gas production. The

Fire Extinguisher

2.5

0.1%

Company planned to produce these petroleum

Vehicle

13.8

0.4%

products

Preliminary Expense

140.0

4.2%

Contingency Expense

66.7

2.0%

IDCP

312.0

9.4%

Project Cost Excluding IDCP

3,000.0

90.6%

Project Cost Including IDCP

3,312.0

100.0%

Note: Amount in BDT Million

condensate daily to produce LPG, Octane, SBP,
Turpentine, Kerosene, and Diesel. Condensate is

to

sell

to

Bangladesh

Petrobangla

Corporation at the price fixed by the Government.
The Company got licence from Ministry of Power,
Energy and Mineral Resources.
The project site is located at Mongla Port at Khulna,
which is considered a good location connected with
port facilities, river, road and rail access.

The

due

to

delay

completing

construction

work,

confirming with suppliers’ contract and contract
with

Bangladesh

Petroleum

Corporation,

Petrobangla etc.

CRAB ICRAB Ratings on Corporate Credit Digest I 29 January 2013

Page 1 of 3

CRAB Rating Report

implementation of the project has been lingered

crab.700. Projects rated in this cohort have adequate capacity to meet financial commitments but more susceptible to adverse economic conditions or changing circumstances. The Company has been facilitated long-term loan of BDT 1. The shareholders have already invested their portion of BDT 1.300. Initially the project was designed at cost of BDT 2. www.bd. in later period the cost was increased by 25% due to BDT depreciation against value of USD.com Page 2 of 3 . The project site also enjoys all infrastructure facilities such as electricity. However.com.087. Day-to-day operations would be hampered if the working capital management were in stuck.0 by different commercial banks. the Company would require working capital of BDT 3. They are subject to moderate credit risk.000. www. Such rated projects possess certain speculative characteristics.7 million from the first year of operation.Petromax Refinery Ltd.7 million.crabrating.391. gas. skilled labour etc. Total size of the project is BDT 3.0 million out of which 57% will be contributed by the shareholders. The Company has not yet fixed gas condensate suppliers. it also require huge non-funded working capital fund importing the condensate. The working capital will be needed for import condensate in form of non-funded facility.0 million. As per management provided information.

B2. with little prospect for recovery of principal or interest. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category. CCC1. These companies are judged to be of the highest quality. B3 Companies rated in this category have weak capacity to meet financial commitments. A2. These companies are typically in default. *Note: CRAB appends numerical modifiers 1. Single B These companies have speculative elements. Such companies possess certain speculative characteristics. CCC3 Triple C CC Double C Companies rated in this category have very weak capacity to meet financial obligations. A3 Single A Definition Companies rated in this category have extremely strong capacity to meet financial commitments. and 3 to each generic rating classification from AA through CCC. These Triple B companies are subject to moderate credit risk. have payment C Single C arrearages allowed by the terms of the documents. Companies rated in this category are highly vulnerable to non-payment. subject to very low credit risk. These companies are judged to be of very high quality. the modifier 2 indicates a mid-range ranking. default. Double B financial. Companies rated in this category have inadequate capacity to meet financial BB1. Have major ongoing uncertainties and exposure to adverse business. These companies are highly speculative and are likely in. subject to high credit risk. BBB2. These companies have speculative elements. BBB3 but more susceptible to adverse economic conditions or changing circumstances. B1. BB3 commitments. Payments may have been suspended in accordance with the instrument's terms. subject to low credit risk. BB2. CRAB RATING SCALES AND DEFINITIONS –Long Term (Corporate) Long Term Rating AAA Triple A AA1. AA2. CCC2. or subject of bankruptcy petition. or economic conditions. These companies are judged to be of high quality. 2. AA3* Double A A1. with some prospect of recovery of principal and interest. with minimal credit risk. Companies rated in this category have adequate capacity to meet financial commitments BBB1. CRAB I CRAB Ratings on Corporate Credit Digest I 29 January 2013 Page 3 of 3 .Petromax Refinery Ltd. or very near. Companies rated in this category have strong capacity to meet financial commitments. and the modifier 3 indicates a ranking in the lower end of that generic rating category. These companies have very weak standing and are subject to very high credit risk. but have not experienced a payment default. Companies rated in this category have very strong capacity to meet financial commitments. subject to substantial credit risk. Companies rated in this category have extremely weak capacity to meet financial obligations. but are susceptible to the adverse effects of changes in circumstances and economic conditions. D (Default) D rating will also be used upon the filing of a bankruptcy petition or similar action if payments on an obligation are jeopardized.

and each provider of credit support for. EXPRESS O R IMPLI ED. lost profits). complet eness. Any adverse changes in circumstances are unlikely to affect the payments on the loan facility. with regard to timely payment of financial obligations. compensatory or incidental da ma ges whatsoever (incl uding without li mitation. timely payment of financial obligations is possible only if favorable circumstances continue. if any. or relating to. CC (Lr) Extremely High Risk Loans/facilities rated CC (Lr) are judged to be extremely vulnerable to default. and the issues are quite vulnerable to the adverse effects of changing circumstances. CREDI T RATI NG A GENC Y OF BANGLA DESH LIMITED ("CRAB"). ST-5 This rating indicates that the degree of safety regarding timely payment on the loans/facilities is minimal. consequential. in particular. Under no circumstances shall C RAB have any liability to any person or entity for (a) any loss or da mage in whol e or in part caused by.Petromax Refinery Ltd. indirect. LONG-TERM RATING: LOANS/FACILITIES FROM BANKS/FIS (All loans/facilities with original maturity exceeding one year) RATINGS AAA (Lr) (Triple A) Highest Safety AA (Lr)* (Double A) High Safety A (Lr) DEFINITION Loans/facilities rated AAA (Lr) are judged to offer the highest degree of safety. NO WARRA NTY. resulting from. each security that it may consi der purchasing. timely payment of financial obligations is possible only through external support. any such infor mation. express or i mpli ed. and each such user mu st accordingly make its own study and evaluation of each security and of each issuer and guarantor of. sell or hol d any securities. This rating indicates that the loans/facilities are expected to be in default on maturity or is in default. special. REPACKAGED. Each rating or other opinion must be w eighed solely as one factor in any invest ment deci sion made by or on behalf of any user of the infor mation contained herein. holding or selling. www. and 3 to each generic rating classification from AA through CCC. SHORT-TERM CREDIT RATING: LOANS/FACILITIES OF BANKS/FIS (All loans/facilities with original maturity within one year) DEFINITION ST-1 Highest Grade ST-2 High Grade ST-3 This rating indicates that the degree of safety regarding timely payment on the loans/facilities is very strong. however. but an Safety adverse change in circumstances could lead to inadequate capacity to make payment on financial obligations. COMPLETENESS. officers. publication or delivery of any such information. This rating indicates that the degree of safety regarding timely payment on the loans/facilities is strong. B ecause of the possibility of huma n or mechani cal error as well as other factors. DISSEMI NATED. however. *Note: CRAB appends numerical modifiers 1. the Adequate Grade issues are more vulnerable to the adverse effects of changing circumstances than issues rated in the two higher categories. compilation. TRA NSFERRED. and the modifier 3 indicates a ranking in the lower end of that generic rating category. Loan/facilities rated A (Lr) are judged to offer an adequate degree of safety. A LL I NFO RMATIO N CO NTAI NED HEREI N I S PRO TEC TED BY COPYRI GHT LAW AND NO NE O F SUCH INFORMA TION MAY BE COPIED O R OTHERWISE REPRO DUC ED. communication. This rating indicates that the degree of safety regarding timely payment on the loans/facilities is adequate. analysis. coll ection. having obligations with payment arrearages allowed by the terms of the documents. C is typically in default. with regard to timely payment of financial obligations for the present. 2. merchantability or fitness for any particular purpose of any such infor mation. mak es no representation or warranty. with little prospect for recovery of principal or interest. CCC (Lr) Very High Risk Loans/facilities rated CCC (Lr) are judged to have factors present that make them very highly vulnerable to default. Loans/facilities rated AA (Lr) are judged to offer a high degree of safety. or obligations that are subject of a bankruptcy petition or similar action but have not experienced a payment default. However. even if C RAB is advised in a dvance of the possibility of such da mages. All rights reserved. however. as to the accuracy. They differ only marginally in safety from AAA (Lr) rated facilities. B (Lr) High Risk Loans/facilities rated B (Lr) are judged to have high risk of default. with little prospect for recovery of principal or interest. O R STORED FO R SUBSEQUENT USE FOR A NY SUC H PU RPOSE. The credit ratings and financial reporting analysis observations. int erpretation. they are less likely to default in the immediate future than instruments in lower rating categories. statements of opinion and not statements of fact or recommendations to purchase. with regard to timely payment of financial Adequate Safety obligations. ST-4 Marginal This rating indicates that the degree of safety regarding timely payment on the loans/facilities is marginal. changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal than for issues in higher rating categories.bd.com. www. while currently financial obligations are met. however. TIMELINESS. D (Lr) Default Loans/facilities rated D (Lr) are in default or are expected to default on scheduled payment dates. the modifier 2 indicates a mid-range ranking. A S TO THE A CCURAC Y. and must be construed sol ely as. IN W HOLE O R IN PART. © Copyright 2012. BB (Lr) (Double B) Inadequate Loans/facilities rated BB (Lr) are judged to carry inadequate safety. the relative degree of safety is lower than that for issues rated higher. REDI STRIBUTED OR RESO LD. ti meli ness. MERC HANTABILI TY O R FITNESS FO R ANY PARTICULA R PU RPOSE OF A NY SUC H RATI NG OR OTHER OPINION O R I NFORMA TION IS GIVEN O R MA DE BY CRAB IN ANY FORM OR MA NNER WHATSOEVER. FURTHER TRA NSMI TTED. changes in circumstances can adversely affect such issues more than those in the higher rating categories.crabrating. IN ANY FORM O R MANNER O R BY ANY M EANS WHA TSO EVER. C (Lr) are typically in default. BY ANY PERSO N WITHOU T CRAB’S P RIOR W RITTEN CONSENT. All information contained herein is obtained by CRAB from sources believed by it to be accurate and reliabl e. with regard to timely payment of financial obligations. with regard to timely payment of financial obligations. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category. C (Lr) Near to Default Loans/facilities rated C (Lr) are currently highly vulnerable to non-payment.crab. BBB (Lr) (Triple B) Moderate Safety Loans/facilities rated BBB (Lr) are judged to offer moderate safety. resulting from the use of or inability to use. and it is likely Inadequate Grade ST-6 Lowest Grade to be adversely affected by short-term adversity or less favorable conditions. employees or agents in connection with t he procurement. or (b) any direct.com Page 4 of 4 . any error (negligent or otherwise) or other circumstance or contingency within or outside t he control of CRAB or any of its directors. such infor mation is provided “as is” without warranty of any kind a nd CRAB. adverse business or economic conditions would lead to lack of ability or willingness to pay interest or principal. constituting part of the infor mation contained herein are.