/raid1/www/Hosts/bankrupt/TCRAP_Public/130711.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, July 11, 2013, Vol. 16, No. 136
Headlines
A U S T R A L I A
BPA PRINT: More Than 23% of Unsecured Debt Was Over 60 Days
BUNNY BITES: Business Sold After Going Into Administration
EL ZORRO: High Court Appoints HoskingHurst as Liquidators
GEOSCIENCE ASSOCIATES: Clifton Hall Appointed as Liquidators
KENTOR GOLD: Trading of Shares to Resume Today
RARE COIN: In Liquidation; Owes Private Investors Millions
* AUSTRALIA: ACT Business Survival Rate 'Worst in the Country'
C H I N A
CHINA RONGSHENG: Seeks Financial Aid From Chinese Cities
I N D I A
BGR MINING: CRISIL Lowers Rating on INR650MM Loan to 'B+'
DAYSTAR ENVIRO: CRISIL Assigns 'BB-' Rating to INR54.5MM Loans
OPAQUE CERAMICS: CRISIL Assigns 'BB-' Rating to INR85MM Loan
PALLIPALAYAM SPINNERS: CRISIL Cuts Ratings on INR417.6M Loan to D
PASARI MULTIPROJECTS: CRISIL Reaffirms B Rating on INR320MM Loan
PRATIK HOSIERY: CRISIL Assigns 'D' Ratings to INR80MM Loans
PRECISION POLYPLAST: CRISIL Reaffirms 'BB' Rating on INR40MM Loan
PRESSCO ENGINEERING: CRISIL Rates INR52MM Loan to 'CRISIL D'
PRITHVI FERRO: CRISIL Cuts Ratings on INR1.30BB Loans to 'D'
RADHE RADHE: CRISIL Raises Ratings on INR139.8MM Loans to 'B+'
RAJESHWARI METPRO: CRISIL Reaffirms 'B+' Rating on INR30MM Loan
SAHASTRAA EXPORTS: CRISIL Ups Rating on INR75MM Loan to 'BB-'
SANT RUBBERS: CRISIL Reaffirms 'BB+' Ratings on INR120MM Loans
SAPALA ORGANICS: CRISIL Upgrades Ratings on INR52MM Loans to 'B+'
SHIKHA JEWELLERS: CRISIL Upgrades Rating on INR80MM Loan to 'B+'
SWASTIK CERACON: CRISIL Revokes Suspension, Assigns 'D' Ratings
J A P A N
SOFTBANK MOBILE: S&P Lowers Rating on Class A Interest to BB+
V I E T N A M
* VIETNAM: Fitch Says Bad Bank May Not Fully Tackle Bad Debt Woes
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A U S T R A L I A
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BPA PRINT: More Than 23% of Unsecured Debt Was Over 60 Days
-----------------------------------------------------------
Steven Kiernan at ProPrint reports that liquidators' report into
BPA Print Group illustrates the difficulty suppliers face in
managing credit risk, with hundreds of thousands of dollars
outside 60 days.
ProPrint says the issue of credit control has been front and
centre for many suppliers -- and BPA is evidence that it is no
easy matter to bring rogue customers into terms.
The book printer is now in liquidation after Glenn John Spooner
-- gspooner@corcordis.com.au -- from Cor Cordis was appointed on
July 4, ProPrint discloses.
Citing figures published in BPA's Report as to Affairs (RATA),
ProPrint discloses that more than 23% of its AUD1.7 million of
unsecured debt was outside 60-day terms.
However, there are question marks over some of the figures in the
report, which was compiled by BPA's former directors, the report
notes. A number of creditors revealed different figures to those
in the RATA.
Salvatore Algeri and Simon Alexander Wallace Smith from Deloitte
were appointed as receivers on March 19, 2013.
Established in 1904, BPA Print Group is a Melbourne-based printer.
It was originally known as Brown Prior Anderson.
BUNNY BITES: Business Sold After Going Into Administration
----------------------------------------------------------
Ashley Walmsley at The Land reports that Bunny Bite Foods, a
queensland vegetable processing business, has been sold to VegPro
after going into voluntary administration last month.
Administrators, the Robson Cotter Insolvency Group, were appointed
to the Boonah-based business Bunny Bite Foods (previously Bunny
Bite Farms) on June 8.
An initial creditors meeting was held on June 20, with a second
scheduled for Monday, July 15, according to the report.
The report relates that a spokesperson for Robson Cotter confirmed
Bunny Bite Foods had been sold and that it was "business as usual"
for the operation.
The report says that one of the directors of the company was
Ausveg Chairman John Brent, who has since stepped down as a
director.
The report notes that according to the Australian Securities and
Investments Commission (ASIC) website, VegPro 4 registered as a
company on April 18 this year and is based in Milton, Queensland.
The report notes that Fairfax Media has been told vegetable
growers in South Australia, Queensland and Tasmania are owed money
by the company, possibly as unsecured creditors.
However, the report relays that an Ausveg spokesperson denied
growers were owed millions of dollars and said Mr. Brent had made
a lot of personal sacrifice to ensure growers were paid. "The
company went into administration to protect the suppliers," the
report quoted the spokesperson as saying. The spokesman added
that Mr. Brent had been vigilant in maintaining a distinction
between his role at Ausveg and his role as director at the
business, the report notes.
EL ZORRO: High Court Appoints HoskingHurst as Liquidators
---------------------------------------------------------
Peter Hemphill at Weekly Times Now reports that liquidators have
been appointed to wind up Victorian rail operator El Zorro
Transport Pty Ltd.
According to the report, the Supreme Court of NSW appointed
David Hurst -- dhurst@hoskinghurst.com.au -- and Philip Hosking
-- phosking@hoskinghurst.com.au -- of HoskingHurst, as liquidators
on July 9 after hearing an application made by creditor
Consolidated Rail Leasing Pty Limited to wind up El Zorro
Transport.
Weekly Times Now relates that the move means voluntary
administrators from specialist insolvency practice Jirsch
Sutherland are no longer acting in relation to the company.
Cargill Australia had threatened to take legal action over the
appointment of Jirsch Sutherland as administrators of El Zorro
Transport, the report notes.
Weekly Times Now notes that Mr. Hurst said the liquidators were
taking steps to obtain El Zorro Transport's records to begin its
investigations.
He said they were also making contact with the Rail, Tram and Bus
Union to facilitate the lodgement of claims by former El Zorro
Transport employees for payment of outstanding entitlements, the
report adds.
El Zorro Transport Pty Ltd is a Victorian-based rail operator.
The Company collapsed with debts believed to be well in excess of
AUD10 million. That included a claim by Cargill Australia for
more than AUD6 million and about AUD3 million owed to V-Line and
government rail authorities. About 130 staff are believed to be
owed money in unpaid wages, superannuation and other entitlements,
Weekly Times Now discloses.
GEOSCIENCE ASSOCIATES: Clifton Hall Appointed as Liquidators
------------------------------------------------------------
Mark Hall and Timothy Clifton of Clifton Hall were appointed as
joint and several liquidators of Geoscience Associates Australia
Pty Ltd on July 8, 2013.
A meeting of creditors will be held at 10:00 a.m. on July 19,
2013, in the offices of Clifton Hall, Level 1, 12 Gilles Street,
in Adelaide.
KENTOR GOLD: Trading of Shares to Resume Today
----------------------------------------------
Kentor Gold Limited provides the following summary of current
status of events relating to the Company and advises shareholders
that shares in Kentor will resume trading on the Australian
Securities Exchange (ASX) on July 11, 2013.
Murchison Project
Kentor Minerals (WA) Pty Ltd (KMWA) has been under administration
since March 28, 2013, after the Company was unsuccessful in
obtaining financing for the Murchison operations.
Kentor has proposed a Deed of Company Arrangement (DOCA) to the
creditors of the KMWA, the details of which was considered at the
Creditors meeting on July 10, 2013. The outcome of the meeting
will be advised to shareholders before the resumption of trade on
July 11, 2013.
Andash Project
As previously advised, Kentor has entered into an agreement to
sell the Andash Gold-Copper Project to Robust Resources Limited
(Robust). Shareholders will have the opportunity to approve the
sale of this project at the shareholder meeting which has been
scheduled for the Aug. 8, 2013.
If approved by shareholders, Kentor will receive $13.5 million at
settlement, scheduled for 2 days after the meeting of
shareholders.
It is Kentor's intention to use these funds to
(1) Undertake exploration activities and continue the
feasibility study on the Company's Jervois Project
(2) Contribute to the creditors of KMWA under the DOCA if
accepted by creditors.
Kentor has already received a deposit of $1.5 million from Robust
Resources. If shareholder approval is not obtained for the sale of
Andash, Kentor will be required to repay the deposit in full. With
a current cash balance of $0.8 mill, Kentor will therefore have
insufficient funds to carry on business.
Jervois Project
A 20,000m drilling programme has been scheduled to commence in
August. The drilling programme is designed to increase the size of
the resource at Jervois. A pre-feasibility study is scheduled for
completion in January 2014 followed by a definitive feasibility
study.
Kentor Gold Limited (ASX:KGL) -- http://www.kentorgold.com.au/--
is an Australian-based company engaged in the exploration and
development of gold and base metals projects in the Kyrgyz
Republic.
RARE COIN: In Liquidation; Owes Private Investors Millions
----------------------------------------------------------
ABC News reports that West Australian-based The Rare Coin Company
has gone into liquidation owing private investors what is believed
to be tens of millions of dollars. Perth-based Sheridans
Chartered Accounts has been appointed liquidator.
ABC News relates that the company encouraged investors nationally
and overseas to purchase rare coins and notes which could then be
sold at a profit. The company focused particularly on encouraging
Australian farmers to invest in the scheme.
It is understood the company has hundreds of creditors who
together are owed millions of dollars, the report relays.
According to the report, Albany investor Rosalynd Sawyer said she
had invested in the company for 10 years, but her attempts to sell
her investments in the past 18 months have proved unsuccessful.
ABC News relates that Ms. Sawyer said the company's collapse has
left her facing major financial difficulties.
* AUSTRALIA: ACT Business Survival Rate 'Worst in the Country'
--------------------------------------------------------------
Louise Willis at ABC News reports that the ACT Government is being
urged to do more for business development with new figures showing
more businesses are becoming insolvent.
ABC News says the Australian Securities and Investments Commission
data for the March quarter of the 2012-13 financial year show 42
insolvency appointments.
That is up 5 per cent on the previous quarter and up more than
40 per cent on the same period a year ago, the report relates.
According to the report, Andrew Blyth from the ACT Chamber of
Commerce and Industry said the figures confirm that people have
stopped spending money in restaurants and shops.
"The ACT does have the lowest business survival rate in the
country," the report quotes Mr. Blyth as saying.
Only 59 per cent of businesses opening in 2008 were still
operating in 2012, the report notes.
ABC News relates that Mr. Blyth said the ACT Government's business
diversification strategy is good, but more is needed.
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C H I N A
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CHINA RONGSHENG: Seeks Financial Aid From Chinese Cities
--------------------------------------------------------
Bloomberg News reports that China Rongsheng Heavy Industries Group
Holdings Ltd. is in talks with two coastal cities and government
departments to secure financial assistance, as the nation's
shipowners association forecast a slump in vessel orders will run
through next year.
The country's largest shipyard outside state control is in
discussions with Rugao and Nantong cities and some ministry-level
departments related to the shipping industry, Rongsheng spokesman
William Li told Bloomberg by phone. Bloomberg relates that the
company said July 5 it was seeking financial assistance from the
government after a plunge in orders forced it to reduce production
and "restructure" its workforce. Li declined to elaborate.
"It will be difficult to see an obvious recovery before the end of
next year in demand for ships," Zhang Shouguo, vice president of
the China Shipowner's Association, told Bloomberg in a telephone
interview on July 8. "The shipping industry has been in a downturn
for at least three years."
According to Bloomberg, Rongsheng and other Chinese shipmakers are
struggling as a global vessel glut makes orders more difficult to
win and pushes down prices. China has also identified shipbuilding
as an industry with overcapacity, for which authorities won't
approve new projects and will limit financing as part of Premier
Li Keqiang's campaign to reduce the economy's reliance on exports
and investment for growth.
Set up in 2005 and owned by private investors, Rongsheng has
become one of China's biggest shipbuilders, the Wall Street
Journal disclosed. Last year, it was China's third biggest
shipbuilder in terms of output in deadweight tonnage, a measure of
how much weight a ship can carry, according to Clarkson Research
Services, the research arm of Clarkson shipbrokers. The two
largest shipbuilders are state-owned.
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I N D I A
=========
BGR MINING: CRISIL Lowers Rating on INR650MM Loan to 'B+'
---------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of BGR
Mining & Infra Pvt Ltd to 'CRISIL B+/Stable/CRISIL A4' from
'CRISIL BB/Negative /CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft Facility 650.0 CRISIL B+/Stable (Downgraded
from CRISIL BB/Negative)
Bank Guarantee 100.0 CRISIL A4 (Downgraded from
CRISIL A4+)
Bank Guarantee 130.0 CRISIL A4 (Downgraded from
CRISIL A4+)
The rating downgrade reflects deterioration in BGRM's liquidity
with the company's large debt-funded capital expenditure (capex)
expected to result in a substantial increase in its term debt
obligations, and the company's cash accruals expected to tightly
match the same. Furthermore, the company's ongoing project to
construct a four-star hotel in Hyderabad (Andhra Pradesh) has been
further delayed and is now expected to be completed in the first
quarter of 2014-15 (refers to financial year, April 1 to
March 31); the project was initially expected to be completed by
March 2012. CRISIL believes that BGRM will need fresh capital from
its promoters, or it would have to register a substantial
improvement in its cash accruals, to alleviate the pressure on its
liquidity.
The company is planning to undertake a capex programme of about
INR1.2 billion in 2013-14 to purchase commercial vehicles,
90 per cent of which is proposed to be funded through debt. With
the said capex, the company's annual term debt obligations are
expected to increase significantly to around INR700 million in
2013-14. Although the company's cash accruals, estimated at around
INR380 million in 2012-13 (refers to financial year, April 1 to
March 31), are expected to increase on the back of healthy growth
in revenues, they would tightly match its annual term debt
obligations over the next two year. The company's large working
capital requirements have also resulted in its high average bank
limit utilisation of over 90 per cent for the last 12 months ended
March 2013.
CRISIL's ratings on the bank facilities of BGRM reflect its below-
average financial risk profile, marked by high gearing and average
debt protection metrics, its large working capital requirements,
and exposure to risks related to implementation of its ongoing
hotel project. These rating weaknesses are partially offset by
BGRM's established market position in the overhead burden
excavation project segment.
Outlook: Stable
CRISIL believes that BGRM will maintain its established position
in the overhead burden excavation project segment, supported by
its promoter's extensive industry experience and its healthy order
book. The outlook may be revised to 'Positive' in case of
substantial and sustained improvement in BGRM's profitability
margin, while registering healthy revenue growth or in case of
improvement in the company's working capital management.
Conversely, the outlook may be revised to 'Negative' if BGRM
registers a steep decline in its profitability margin from current
levels or in case of significant deterioration in its liquidity
because of larger-than-expected working capital requirements.
BGRM (formerly, B Girijapathi Reddy & Co) was set up in 1988 as a
partnership firm and was reconstituted as a private limited
company in April 2011. BGRM undertakes excavation and overburden
removal of coal mines for mining companies. The company is
constructing a four-star hotel at Banjara Hills in Hyderabad at an
estimated cost of INR700 million; the hotel is expected to begin
operations by the first quarter of 2013-14.
DAYSTAR ENVIRO: CRISIL Assigns 'BB-' Rating to INR54.5MM Loans
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL BB-/Stable/CRISIL A4+' ratings to
the bank facilities of Daystar Enviro Technologies Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 2 CRISIL BB-/Stable
Proposed Long-Term 37.5 CRISIL BB-/Stable
Bank Loan Facility
Bank Guarantee 20.5 CRISIL A4+
Cash Credit 15.0 CRISIL BB-/Stable
The ratings reflect the benefits that Daystar derives from its
promoters' extensive experience in the engineering industry. The
ratings also factor in Daystar's above average financial risk
profile marked by healthy capital structure and modest debt
protection metrics albeit on a low net worth base. These rating
strengths are partially offset by Daystar's modest scale of
operations and susceptibility of its performance to receipt of
orders and timely realisation of receivables. The ratings are also
constrained by the company's working capital intensive nature of
operations.
Outlook: Stable
CRISIL believes that Daystar will continue to benefit over the
medium term from its promoters' extensive experience in the
engineering industry. The outlook may be revised to 'Positive' in
case there is significant and sustainable growth in the company's
revenue while maintaining its profitability and capital structure.
Conversely, the outlook may be revised to 'Negative' in case of a
sharp decline in the company's revenues or profitability margins
or elongation of its working capital cycle resulting in a
significant weakening in its financial risk profile.
Daystar was incorporated in 2007 by Vadodara (Gujarat) based Kadam
family. Daystar undertakes turnkey projects in the area of water
treatment, waste water effluent treatment and sewage treatment.
Mr. Chittranjan Kadam oversees the day-to-day operations of the
company.
For 2012-13 (refers to financial year, April 1 to March 31),
Daystar reported on a provisional basis a profit after tax (PAT)
of INR7.0 million on net sales of INR101.2 million, as against a
PAT of INR1.9 million on net sales of INR40.0 million for 2011-12.
OPAQUE CERAMICS: CRISIL Assigns 'BB-' Rating to INR85MM Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL BB-/Stable' rating to the bank
loan facilities of Opaque Ceramics Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 85.0 CRISIL BB-/Stable
The rating reflects the experience of OCPL's promoters in the
industry leading to established relationships with customers and
suppliers, and moderate capital structure. These rating strengths
are partially offset by the susceptibility of OCPL's operating
margin to raw material price volatility and to its small scale of
operations in the industry.
Outlook: Stable
CRISIL believes that OCPL will maintain its business risk profile
over the medium term, backed by its promoters' experience in the
industry. The outlook may be revised to 'Positive' in case of an
improvement in the company's scale of operations and
profitability, resulting in higher-than-expected cash accruals.
Conversely, the outlook may be revised to 'Negative' if OCPL's
revenues or profitability declines or its financial risk profile
weakens because of stretch in the company's working capital cycle.
Incorporated in 1994, OCPL is promoted by Mr. Mahendra Vora and
his family. The company manufactures zirconium silicate used in
the ceramic and vitrified tile industry for whitening and glazing
tiles.
OCPL reported a net profit of INR32.2 million on net sales of
INR265.3 million for 2011-12 (refers to financial year, April 1 to
March 31), against a net profit of INR9.5 million on net sales of
INR230.1 million for 2010-11. The company is estimated to have
achieved net sales of INR334.3 million for 2012-13 on a
provisional basis.
PALLIPALAYAM SPINNERS: CRISIL Cuts Ratings on INR417.6M Loan to D
-----------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Pallipalayam Spinners Pvt Ltd to 'CRISIL D/CRISIL D' from 'CRISIL
B+/Stable/CRISIL A4'. The downgrade reflects instances of delay
by PSPL in servicing its debt; the delays have been caused by the
company's weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 170 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Corporate Loan 3.5 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Letter of Credit 95.0 CRISIL D (Downgraded from
'CRISIL A4')
Long-Term Loan 149.1 CRISIL D(Downgraded from
'CRISIL B+/Stable')
PSPL is also exposed to supplier concentration risk and is
susceptible to volatility in raw material prices. However, the
company benefits from its established position in the viscose yarn
industry, supported by its long-standing relationships with its
clients, and moderate financial risk profile marked by a
comfortable gearing and moderate debt protection metrics.
PSPL, located in Salem (Tamil Nadu), manufactures viscose yarn. It
is promoted by Mr. P.Nagarajhan.
PSPL incurred a net loss of INR26.5 million on net sales of
INR832.2 million for 2011-12 (refers to financial year, April 1 to
March 31), against a net profit of INR25.4 million on net sales of
INR1.06 billion for 2010-11.
PASARI MULTIPROJECTS: CRISIL Reaffirms B Rating on INR320MM Loan
----------------------------------------------------------------
CRISIL's rating on bank facilities of Pasari Multiprojects Pvt Ltd
continues to reflect Pasari's weak business risk profile,
constrained by its promoter's limited experience in the commercial
real estate space, leading to project implementation risks.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 320 CRISIL B/Stable (Reaffirmed)
The implementation risk is also reflected in the significant
change in scope of the company's Bio Wonder project pursuant to
which the cost of the project has gone up to around INR1700
million from around INR950 million envisaged earlier. The rating
also factors in Pasari's exposure to saleability risks for
commercial space, and to funding risks in terms of dependence on
customer advances. These rating weaknesses are partially offset by
expected financial support, in terms of regular equity infusion,
to Pasari from its promoter.
Outlook: Stable
CRISIL believes that Pasari will maintain its financial risk
profile over the medium term on the back of healthy customer
advances and bookings it has received for its Bio Wonder project.
The outlook may be revised to 'Positive' if Pasari reports better-
than-expected sales of commercial space, resulting in stable cash
flows and timeliness in debt servicing. Conversely, the outlook
may be revised to 'Negative' if the company's financial risk
profile deteriorates, most likely because of further time or cost
overrun in its project, or lack of timely and adequate financial
support from the promoter.
Pasari, incorporated in 1993, is a special-purpose vehicle formed
by the Pasari group to undertake the construction of Bio Wonder,
comprising a commercial complex and a four-star hotel, in
Anandapur, East Calcutta Township (along Eastern Metropolitan
bypass), Kolkata (West Bengal).
PRATIK HOSIERY: CRISIL Assigns 'D' Ratings to INR80MM Loans
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL D/CRISIL D' ratings to the bank
facilities of Pratik Hosiery Private Limited (PHPL, a part of the
Pratik group). The ratings reflect instances of delay by the
Pratik group in servicing its debt owing to weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Letter of Credit 10 CRISIL D
Cash Credit 20 CRISIL D
Export Packing Credit 50 CRISIL D
The Pratik group has small scale and working-capital-intensive
operations, and a below-average financial risk profile marked by
weak debt protection metrics. The group, however, benefits from
the extensive industry experience of its promoters in the
readymade garments segment.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of PHPL and Dravid Knits Pvt Ltd together
referred to as the Pratik group. This is because both these
entities are managed by the same promoters and have significant
financial linkages with each other.
PHPL, incorporated in 1995, manufactures readymade garments. DKPL,
incorporated in 2001, is currently defunct. The day-to-day
operations of the group are managed by Mr. A R R Venkatachalam.
The Pratik group reported a net loss of INR1.6 million on net
sales of INR334 million for 2011-12 (refers to financial year,
April 1 to March 31) as against profit after tax of INR0.1 million
on net sales of INR352 million for 2010-11.
PRECISION POLYPLAST: CRISIL Reaffirms 'BB' Rating on INR40MM Loan
-----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Precision Polyplast Pvt
Ltd continue to reflect PPPL's moderate business risk profile
supported by its promoters' extensive industry experience. This
rating strength is partially offset by PPPL's working-capital-
intensive operations. The ratings also factor in the
susceptibility of the company's operating margin to volatility in
input prices and foreign exchange rates.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Short Term 133 CRISIL A4+ (Reaffirmed)
Bank Loan Facility
Post Shipment Credit 20 CRISIL A4+ (Reaffirmed)
Overdraft Facility 40 CRISIL BB/Stable (Reaffirmed)
Bank Guarantee 10 CRISIL A4+ (Reaffirmed)
Letter of Credit 50 CRISIL A4+ (Reaffirmed)
Foreign Exchange Forward 2 CRISIL A4+ (Reaffirmed)
Packing Credit 60 CRISIL A4+ (Reaffirmed)
Outlook: Stable
CRISIL believes that PPPL will benefit over the medium term from
its promoters' extensive industry experience. The outlook may be
revised to 'Positive' if PPPL reports higher-than-expected revenue
growth and maintains its profitability, while efficiently managing
its working capital. Conversely, the outlook may be revised to
'Negative' if PPPL faces decline in its revenues or its liquidity
weakens further because of large incremental working capital
requirements.
Update
PPPL's performance in 2012-13 (refers to financial year, April 1
to March 31) was broadly in line with CRISIL's expectation. During
the year, the company achieved an operating income of around
INR1400 million. PPPL has maintained its low profitability levels
as reflected in its operating margin of 2.8 per cent for 2012-13.
The company is engaged in recycling of imported plastic scraps
into plastic flour and agglomerates. The company's product is
primarily used in manufacturing of law grade industrial plastic
sheets, plastic drums and other industrial plastic products. The
company accrues around 40 per cent of its total revenue from
trading activity.
PPPL's liquidity is expected to remain adequate, driven by
moderate bank limit utilisation and cash accruals, and absence of
term debt obligations and debt-funded capital expenditure (capex)
plans, over the medium term. The company's bank limits of INR100
million were moderately utilised at an average 75 per cent over
the 12 months ended June 30, 2013. PPPL has a moderate capital
structure, with net worth and gearing of around INR370 million and
0.4 times, respectively, as on March 31, 2013. Its gearing is
expected to remain healthy in the absence of any major debt-funded
capex plans over the medium term.
For 2012-13, PPPL, on a provisional basis, reported profit after
tax (PAT) of INR9 million on net sales of INR1396 million; the
company had reported a PAT of INR7 million on net sales of
INR834.3 million for 2011-12.
Promoted by the Agrawal family based in Kolkata in 1994, PPPL
recycles imported plastic scraps into plastic flour and
agglomerates. The company's product is primarily used in
manufacturing of law grade industrial plastic sheets, plastic
drums and other industrial plastic products. The company has a
processing capacity of 3000 tonnes per month, which is utilised at
around 60 per cent. The company also undertakes trading of
imported poly granules, plastic scraps, raw cotton and readymade
garments.
PRESSCO ENGINEERING: CRISIL Rates INR52MM Loan to 'CRISIL D'
------------------------------------------------------------
CRISIL has assigned its 'CRISIL D' rating to the long-term bank
facility of Pressco Engineering Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 52 CRISIL D
The ratings reflect prolonged overutilisation of working capital
limits by Pressco owing to its working-capital-intensive
operations.
Pressco also has a below-average financial risk profile, marked by
a relatively weak capital structure and debt protection metrics,
and highly working-capital-intensive operations. These rating
weaknesses are partially offset by the extensive experience of
Pressco's promoter in the engineering industry and its established
relationship with Philips Electronics India Ltd (Philips; rated
'CRISIL AA/ Stable / CRISIL A1+').
Pressco was incorporated in 2002 by Mr. Srinath Dadich and his
family in Kolkata, West Bengal. The company manufactures tube
light fittings for Philips. Pressco has its main unit in Jalan
Industrial Complex (Howrah, West Bengal) and three other ancillary
units in Kolkata. The company also manufactures electrical
components for Bentec Electricals & Electrical Components Pvt Ltd.
PRITHVI FERRO: CRISIL Cuts Ratings on INR1.30BB Loans to 'D'
------------------------------------------------------------
CRISIL has downgraded the rating on the long-term bank facilities
of Prithvi Ferro Alloys Pvt Ltd to 'CRISIL D' from 'CRISIL BB-
/Stable'. The rating reflects instances of delay by PFAPL in
servicing its debt owing to the company's weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long-Term Loan 873.2 CRISIL D (Downgraded from
CRISIL BB-/Stable)
Proposed Long-Term 428.3 CRISIL D (Downgraded from
Bank Loan Facility CRISIL BB-/Stable)
PFAPL continues to remain vulnerable to risks related to project
implementation following significant delays. Although the company
has completed the construction of its captive power plant (CPP),
commercial operations are yet to begin. PFAPL is targeting a
commercial operation date (COD) of November 30, 2013, for the CPP.
The power produced at the CPP is expected to be used in PFAPL's
ferro alloy manufacturing facility, phase I of which is expected
to be completed by October 2013 and phase II by January 2014.
Despite financial support from the promoters, the company's
liquidity remains weak leading to the delays in timely servicing
of debt.
PFAPL was formed for the purpose of setting up a greenfield
integrated steel complex comprising a ferro alloys (13,200 tonnes
per annum of silica-manganese alloys) manufacturing facility and
an 18-megawatt (MW) CPP in the first phase. The company's further
development plans over the medium term include expansion of the
power capacity to 60 MW, sponge iron plant, and a steel-making
facility in the same complex. Currently, PFAPL does not have any
operating cash flow.
The Prithvi group was started by Mr. Bijay Kumar Garodia, Mr.
Ramesh Kumar Sarawagi, and Mr. Shankar Lall Ajitsaria in the
1990s. The Prithvi group has presence across several industries,
including cement, tea, power generation, real estate, steel, and
mining.
RADHE RADHE: CRISIL Raises Ratings on INR139.8MM Loans to 'B+'
--------------------------------------------------------------
CRISIL has upgraded its rating on the bank loan facilities of M/s
Radhe Radhe Fibers to 'CRISIL B+/Stable' from 'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 103 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Term Loan 36.8 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The upgrade reflects improvement in RRF's financial risk profile
driven by capital infusion of INR29.9 million by the partners in
2012-13. The capital infusion has led to an improvement in capital
structure; with gearing at 1.51 times as on March 31st, 2013 as
against 2.77 times in 2011-12. The gearing is expected to be
around 2 times over the medium term. The absence of any large
debt-funded capital expenditure will support the sustenance of the
gearing at the above levels. RRF's debt protection metrics have
also improved, with net cash accruals to total debt (NCATD) ratio
at 0.10 times for 2012-13 (refers to financial year,
April 1 to March 31) against 0.05 times in 2011-12. RRF's debt
protection metrics are expected to remain at the current levels
over the medium term on the back of steady profitability margins.
The firm's liquidity has also improved, with sufficient cushion
between net cash accruals and term debt commitments; the firm's
net cash accruals are expected at around INR16 million in 2013-14
vis-a-vis term debt obligations of around INR8.4 million. The
firm's bank limit utilisation averaged 68 per cent over the 12
months through May 2013.
The rating continues to reflect RRF's presence in a highly
competitive and fragmented cotton ginning industry and
susceptibility of its margins to volatility in cotton prices and
the regulatory framework governing cotton industry. These rating
weaknesses are partially offset by the benefits derived from the
extensive experience of the partners and established relations
with both customers and suppliers in and around Jalgaon
(Maharashtra).
Outlook: Stable
CRISIL believes that RRF will continue to benefit over the medium
term from the established relations of the partners with customers
and suppliers in and around Jalgaon. The outlook may be revised to
'Positive' if the firm increases its scale of operations
substantially, while improving its profitability and capital
structure. Conversely, the outlook may be revised to 'Negative' if
the firm reports lower than expected revenues or profitability or
faces a significant elongation of working capital cycle thereby
impacting its financial risk profile.
RRF was set up as a partnership firm in 2011 by Mr. Radheshyam
Agrawal and Mr. Sunil Agrawal. RRF is engaged in the ginning and
pressing of cotton. Its manufacturing facilities are at Chopda in
Jalgaon.
RRF reported, on a provisional basis, a profit after tax (PAT) of
INR5.1 million on net sales of INR721.3 million for 2012-13,
against a PAT of INR 2.4 million on net sales of INR 521.8 million
in 2011-12.
RAJESHWARI METPRO: CRISIL Reaffirms 'B+' Rating on INR30MM Loan
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Rajeshwari Metpro Pvt
Ltd continue to reflect RMPL's below-average financial risk
profile, marked by modest net worth and weak debt protection
metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 30.00 CRISIL B+/Stable (Reaffirmed)
Letter of Credit 20.00 CRISIL A4 (Reaffirmed)
The ratings also reflect the RMPL's modest scale of operations in
the competitive and fragmented commodity trading business, and the
susceptibility of its profitability to volatility in commodity
prices. These rating weaknesses are partially offset by the
extensive experience of RMPL's promoter in the commodity trading
business.
Outlook: Stable
CRISIL believes that RMPL will continue to benefit over the medium
term from its promoter's extensive experience in the commodity
trading business. The outlook may be revised to 'Positive' in case
of significant improvement in the company's financial risk
profile, particularly its liquidity, most likely driven by better-
than-expected cash accruals and efficient working capital
management. Conversely, the outlook may be revised to 'Negative'
if RMPL's financial risk profile weakens, most likely because of
lower-than-expected cash accruals or larger-than-expected working
capital requirements or debt-funded capital expenditure.
Update
RMPL is likely to have reported revenues of around INR263 million
for 2012-13 (refers to financial year, April 1 to March 31),
registering a year-on-year growth of around 20 per cent. The
company is likely to post operating margin of around 3 per cent
for 2012-13, in line with historical trends and reflective of the
trading nature of its business. The company's financial risk
profile remains weak, marked by modest net worth, estimated at
around INR15 million as on March 31, 2013, and a high gearing,
estimated at around 2 times as on the same date.
RMPL's liquidity remains moderate, marked by average month-end
bank limit utilisation of around 88 per cent over the 12 months
through December 2012. The company's cash accruals are estimated
at INR2.7 million in 2012-13. Its cash accruals over the medium
term are expected to be more than sufficient to meet its term loan
obligations of INR0.3 million per annum, on an average. The
company does not plan any significant debt-funded capex over the
medium term.
RMPL reported a profit after tax (PAT) of INR3.0 million on net
sales of INR216.7 million for 2011-12, against a PAT of INR4.4
million on net sales of INR274.3 million for 2010-11.
RMPL was incorporated in 2009 by Mr. M. Jayaram to take over
operations of group entity Rajeshwari Metallurgical Pvt Ltd. RMPL
mainly trades in non-ferrous metals and alloy scraps, such as
copper, brass, zinc, and aluminium.
SAHASTRAA EXPORTS: CRISIL Ups Rating on INR75MM Loan to 'BB-'
-------------------------------------------------------------
CRISIL has upgraded its ratings on the bank facilities of
Sahastraa Exports Pvt Ltd to 'CRISIL BB-/Stable/CRISIL A4+' from
'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 75 CRISIL BB-/Stable (Upgraded
from 'CRISIL B+/Stable')
Letter of Credit 75 CRISIL A4+ (Upgraded from
'CRISIL A4')
The rating upgrade reflects sustained improvement in Sahastraa's
financial risk profile, particularly in its liquidity and capital
structure, backed by infusion of long-term funds by its promoters,
and by its increasing cash accruals. An increase in its
geographical penetration led to strong growth in its topline to
INR1.5 billion in 2012-13 (refers to financial year, April 1 to
March 31) from INR1.0 billion in 2009-10. However, the same also
resulted in large incremental working capital requirements.
Infusion of INR50 million by promoters over the past two years and
increase in accruals to an estimated INR14 million in 2012-13 has
resulted in improvement in its liquidity, and strengthening of its
total outside liabilities to tangible net worth ratio to 3.5 times
as on March 31, 2013 from 4.3 times as on March 31, 2012. Further
increase in accruals along with maintenance of its working capital
cycle will ensure that the company sustains the improvement in its
liquidity and further strengthens its total outside liabilities to
tangible net worth ratio to less than 3 times over the medium
term. Nevertheless, CRISIL believes that timely need-based support
from the promoters will continue to be a key rating sensitivity
factor.
The ratings reflect Sahastraa's improved business risk profile,
marked by increasing volumes and better operating efficiencies,
supported by its experienced management. These rating strengths
are partially offset by Sahastraa's below-average financial risk
profile, marked by weak capital structure and liquidity, on
account of high working capital intensity.
Outlook: Stable
CRISIL believes that Sahastraa will continue to benefit over the
medium term from its promoters' experience in the chemicals
trading business and its diversified product profile. CRISIL,
however, also believes that Sahastraa's financial risk profile
will remain constrained by the company's weak capital structure
and large working capital requirements. The outlook may be revised
to 'Positive' if Sahastraa registers significant increase in its
cash accruals, or benefits from sizeable equity infusion by its
promoters, resulting in improvement in its capital structure.
Conversely, the outlook may be revised to 'Negative' if
Sahastraa's working capital cycle lengthens, leading to pressure
on its liquidity, or if the company undertakes a larger-than-
expected, debt-funded capital expenditure programme, resulting in
deterioration in its capital structure.
Sahastraa, incorporated in 2000, trades in chemicals. The
company's product portfolio is large and diverse, consisting of
petrochemicals, solvents, ethanolamines and ketones, among other
chemicals. Currently, Sahastraa has two active promoters, Mr.
Suhhail Agarwaal and Ms. Hycinth Fernandes, who manage its day-to-
day operations. The company's head office is at Mumbai
(Maharashtra) and its branch offices are in New Delhi, Hyderabad
(Andhra Pradesh), Haryana, Kandla (Gujarat), Ghazhiabad (Uttar
Pradesh), and Rajasthan. It has a warehouse at Navi Mumbai
(Maharashtra).
Sahastraa, on a provisional basis, reported a profit after tax
(PAT) of INR10.5 million on net sales of INR1.5 billion for 2012-
13 (refers to financial year, April 1 to March 31), against a PAT
of INR7.2 million on net sales of INR1.4 billion for 2011-12.
SANT RUBBERS: CRISIL Reaffirms 'BB+' Ratings on INR120MM Loans
--------------------------------------------------------------
CRISIL's ratings on the bank loan facilities of Sant Rubbers Ltd
continue to reflect the extensive experience of SRL's promoters in
the footwear industry, established relationships with reputed
clients, and above-average financial risk profile, marked by
conservative gearing and robust debt protection metrics. These
ratings strength are partially offset by SRL's working-capital-
intensive and small scale of operations in a fragmented industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 30 CRISIL BB+/Stable (Reaffirmed)
Letter of Credit 30 CRISIL A4+ (Reaffirmed)
Packing Credit 30 CRISIL A4+ (Reaffirmed)
Proposed Long-Term 3.1 CRISIL BB+/Stable (Reaffirmed)
Bank Loan Facility
Term Loan 86.9 CRISIL BB+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that SRL will continue to benefit over the medium
term from its promoters' extensive experience in the footwear
industry. The outlook may be revised to 'Positive' if the
company's scale of operations increases significantly while it
maintains its profitability margins and working capital cycle.
Conversely, the outlook may be revised to 'Negative' if SRL's
financial risk profile deteriorates, most likely because of lower-
than-expected profitability, larger-than-expected working capital
requirements, or large, debt-funded capital expenditure (capex).
Update
SRL's net sales have been flattish with around 4 per cent to
around INR375 million in 2012-13 (refers to financial year,
April 1 to March 31) from INR358 million in 2011-12. The marginal
growth in 2012-13 was because the company has been conservative in
taking up large orders for its shoe manufacturing unit due to
limited availability of skilled labor. However, SRL has hired some
skilled labourers recently and expects to increase its scale of
operations substantially. CRISIL believes that though SRL's sales
will increase over the medium term, they will moderate, thereby
constraining its business risk profile.
SRL's operating margin is estimated to have improved in 2012-13 to
around 14.4 per cent, from 12.8 per cent in 2011-12. The margin
has improved gradually over the past three years largely because
the increasing scale of operations has resulted in better fixed-
cost absorption, and because of stable prices of key raw materials
such as ethylene vinyl acetate (EVA) and styrene-butadiene rubber
(SBR). CRISIL believes that SRL's operating margin will remain
stable in the same range over the medium term.
SRL is not expected to undertake any major expansion plans as it
has recently had significant capex of INR190 million for
increasing the capacity of its shoe sole manufacturing unit to
15,000 pairs per day from 12,000 pairs per day, and setting up its
leather shoe manufacturing facility.
SRL has healthy financial risk profile marked by moderate gearing,
robust debt protection metrics, partially offset by modest net
worth. The company has moderate gearing of 1.5 times as on March
31, 2013. Gearing is expected to further improve over the near to
medium on account of absence of any debt funded capex plans.
Further, company has robust debt protection metrics with interest
coverage ratio of 2.6 times, and net cash accruals to total debt
(NCATD) of 27 per cent as on March 31, 2013. Debt protection
metrics are expected to remain robust over the near to medium
term.
However, company's net worth levels are modest at around INR68
million as on March 31, 2013. Net worth levels are expected to
gradually improve, albeit remain modest, to a range of INR80
million to INR90 million over the near to medium term.
SRL has adequate liquidity. The company had a healthy current
ratio of 1.8 times as on March 31, 2013. It funds its working
capital requirements partially through cash credit and packing
credit facilities of INR60 million and letter of credit facilities
of INR30 million. The cash credit and packing credit facilities
have been moderately utilised, at an average of around 65 per cent
over the 12 months through January 2013. . The company has
generated healthy net cash accruals of around INR32 million in
2012-13, and is expected to generate healthy net cash accruals
which are expected to be adequate to meet term debt repayments of
around INR18 million over the next two year.
SRL reported a profit after tax (PAT) of INR9.5 million on net
sales of INR360.8 million for 2011-12 (refers to financial year,
April 1 to March 31), as against a PAT of INR7.8 million on net
sales of INR287.2 million for 2010-11.
SRL was incorporated in 2000 as a closely held public limited
company, promoted by Mr. Gurbachan Singh Bains and his son,
Mr. Avneet Singh Bains. The company is primarily engaged in
manufacturing rubber soles of varied designs and sizes (for men,
women, and children). It ventured into manufacturing leather shoes
in 2010-11. SRL has its factory in Jalandhar (Punjab).
SAPALA ORGANICS: CRISIL Upgrades Ratings on INR52MM Loans to 'B+'
-----------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Sapala Organics Pvt Ltd to 'CRISIL B+/Stable' from CRISIL
B/Stable.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 20.0 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Long Term Loan 32.0 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The rating upgrade reflects improvement in Sapala's business risk
profile, driven by substantial and sustained increase in the
company's scale of operations, while maintaining its stable
profitability margins. The upgrade also factors the sustained
improvement in Sapala's capital structure and CRISIL's belief that
Sapala will sustain its financial risk profile, supported by its
improving scale of operations and cash accruals over the medium
term.
Sapala's revenues are estimated to have nearly doubled to around
INR120 million in 2012-13 (refers to financial year, April 1 to
March 31) from around INR65 million in 2010-11, while its
operating profit margin remained relatively stable at around 27
per cent over this period. The growth in Sapala's revenues was
mainly driven by the expansion in its clientele to cover the US
market and improved capability of the company to manufacture
larger sample sizes for its various contract research services.
Sapala's healthy operating performance over the past two years,
coupled with infusion of equity by its promoters, has resulted in
a sustained improvement in the company's capital structure and
debt protection measures. The company's gearing is estimated to
have improved to 1.5 times as on March 31, 2013 from 2.2 times as
on March 31, 2011; the gearing is expected to remain moderate at
around 1.5 times over the medium term, supported by improving cash
accruals, despite its debt-funded capital expenditure (capex)
plans.
Outlook: Stable
CRISIL believes that Sapala will continue to benefit over the
medium term from its promoters' extensive experience in the
contract research industry. The outlook may be revised to
'Positive' if there is a substantial and sustained improvement in
Sapala's scale of operations, while maintaining its profitability
and capital structure or there is substantial increase in its net-
worth on the back of equity infusion from promoter. Conversely,
the outlook may be revised to 'Negative' if there is a steep
decline in Sapala's profitability or there is significant
deterioration in its capital structure on account of larger-than-
expected working capital requirements or large debt-funded capex.
Incorporated in 2005, Sapala commenced commercial operations in
2007-08. The Hyderabad-based company is a contract research (CR)
organisation engaged in custom synthesis. The company's core
strength is in carrying out organic synthesis in the
pharmaceuticals and material sciences domain. Sapala derives
significant strength from its promoter-directors, Dr. Masami
Nakane and Dr. P Yella Reddy, who have around three decades of
experience in the pharmaceutical domain.
SHIKHA JEWELLERS: CRISIL Upgrades Rating on INR80MM Loan to 'B+'
----------------------------------------------------------------
CRISIL has upgraded the rating on the bank facilities of Swarn
Shikha Jewellers to 'CRISIL B+/Stable' from 'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 80 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The rating upgrade reflects improvement in SSJ's liquidity, marked
by the firm's increasing cash accruals and reduction in its fund
support to its associate entities. The upgrade also reflects
improvement in the firm's business and financial risk profiles
marked by sharp growth in its scale of operations along with
higher-than-expected operating profitability.
SSJ's liquidity has witnessed an improvement over the past one
year marked by improvement in the firm's cash accruals. The firm's
cash accruals are expected to be around INR16 million during 2013-
14 vis-…-vis zero debt obligations for the same period. Also, SSJ
has reduced its fund support to affiliate companies to around INR8
million in 2012-13 from INR15 million, thereby reducing the
pressure on its liquidity. SSJ's liquidity, however, remains
constrained by working-capital-intensive operations. The large
working capital requirements have resulted in high bank limit
utilisation. SSJ's average bank limit utilisation was at 96 per
cent over the 12 months ended March 31, 2013.
SSJ's business risk profile has also improved, with the firm
estimated to report a turnover of INR287 million (year-on-year
growth of 56 per cent) supported by increase in realisations as
well as aggressive marketing efforts undertaken by the management.
CRISIL believes that SSJ's turnover will continue to grow over the
medium term backed by the continuous marketing efforts of the
management. The firm's operating profitability has remained
healthy, estimated at 11.5 per cent during 2012-13. CRISIL
believes that SSJ's operating margin will remain around the
current levels over the medium term. The financial risk profile of
the firm has also improved, backed by improvement in accretion to
reserves, as reflected in its estimated net worth of INR40 million
and gearing of around 2 times as on March 31, 2013. In the absence
of any debt-funded capital expenditure plans, the improvement in
SSJ's financial risk profile is likely to be sustained over the
medium term.
The rating reflects SSJ's average financial risk profile, marked
by a small net worth and a high gearing, modest scale of
operations, exposure to intense market competition because of
industry fragmentation, and vulnerability to volatility in gold
prices. These rating weaknesses are partially offset by the
extensive experience of SSJ's promoter in the retail jewellery
market.
Outlook: Stable
CRISIL believe that SSJ will continue to benefit over the medium
term from its promoter's extensive experience in the retail
jewellery business. The outlook may be revised to 'Positive' if
the firm significantly increases its scale of operations and
improves its profitability, leading to more-than-expected cash
accruals. Conversely, the outlook may be revised to 'Negative' if
SSJ's financial risk profile, especially its liquidity, weakens,
most likely because of larger-than-expected working capital
requirements or debt-funded capital expenditure, or exposure to
group companies
SSJ was set up as a proprietorship firm in 2005 by Mr. Satish
Maheswari. The firm is involved in the business of retail trading
in jewellery. It has a showroom in Jamnagar (Gujarat).
SWASTIK CERACON: CRISIL Revokes Suspension, Assigns 'D' Ratings
---------------------------------------------------------------
CRISIL has revoked the suspension of its ratings on the bank
facilities of Swastik Ceracon Limited and has assigned its 'CRISIL
D/CRISIL D' ratings to the bank facilities of SCL.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 405 CRISIL D (Assigned;
Suspension Revoked)
Term Loan 207 CRISIL D (Assigned;
Suspension Revoked)
Proposed Long-Term 248.5 CRISIL D (Assigned;
Bank Loan Facility Suspension Revoked)
Letter of Credit 50.0 CRISIL D (Assigned;
Suspension Revoked)
Bank Guarantee 89.5 CRISIL D (Assigned;
Suspension Revoked)
The ratings were previously 'Suspended' by CRISIL vide the Rating
Rationale dated March 29, 2013, since SCL had not provided
necessary information required for a rating view. SCL has now
shared the requisite information enabling CRISIL to assign ratings
to its bank facilities. The rating reflects instances of delay by
SCL in servicing its debt; the delays have been caused by the
company's weak liquidity, driven by large working capital
requirements. Also, SCL's profitability margins are susceptible to
raw material price volatility and intense competition. However,
the company benefits from the extensive experience of its
promoters in the ceramic tiles industry.
Incorporated in 2007, SCL is promoted by Mr. Girish Patel,
Mr. Chandresh Patel, Mr. Pankaj Patel and their family member. The
company manufactures various kinds of ceramic, porcelain, and
vitrified floor tiles.
SCL reported a net profit of INR57.6 million on net sales of
INR1615.1 million for 2011-12 (refers to financial year, April 1
to March 31), against a net profit of INR80.7 million on net sales
of INR1346.1 million for 2010-11. The company reported, on a
provisional basis, net sales of INR1716.9 million for 2012-13.
=========
J A P A N
=========
SOFTBANK MOBILE: S&P Lowers Rating on Class A Interest to BB+
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it has lowered its
ratings on the class A investor beneficial interest and asset-
backed loan (ABL) issued/extended under the Softbank Mobile Lease
And Loan Receivables Securitization Beneficial Interests and ABL
Series 4 asset-backed securities (ABS) transaction and removed the
ratings from CreditWatch with negative implications. S&P had kept
the ratings on CreditWatch negative since Oct. 15, 2012.
S&P lowered its ratings on class A and the ABL to reflect its
lowering of its long-term corporate credit and senior unsecured
debt ratings on Softbank Corp. on July 8, 2013.
Lease and loan receivables extended to Softbank Mobile Corp.
(SBM), a wholly owned subsidiary of Softbank, secure the
transaction. SBM's credit quality, in S&P's view, is largely
influenced by the credit quality of Softbank.
STANDARD & POOR'S 17G-7 DISCLOSURE REPORT
SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and a
description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.
If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:
http://standardandpoorsdisclosure-17g7.com
RATINGS LOWERED, REMOVED FROM CREDITWATCH NEGATIVE
Softbank Mobile Lease And Loan Receivables Securitization
Beneficial Interests
and ABL Series 4
JPY9.9 bil. beneficial interests and ABL due August 2015
Class To From Initial amount
Coupon type
Class A investor beneficial interest
BB+ (sf) BBB (sf)/Watch Neg JPY8.9 bil.
Fixed
ABL
BB+ (sf) BBB (sf)/Watch Neg JPY1.0 bil.
Fixed
=============
V I E T N A M
=============
* VIETNAM: Fitch Says Bad Bank May Not Fully Tackle Bad Debt Woes
-----------------------------------------------------------------
The creation of a Vietnamese asset management company (VAMC), or
"bad bank", to buy non-performing loans (NPLs) is unlikely to
fully resolve the banks' asset-quality problems unless accompanied
by meaningful regulatory improvements, Fitch Ratings says. With no
fresh capital, the banks are likely to be limited in their ability
to restructure and support the domestic economy.
"We believe Vietnamese banks may still face capital-impairment
risks even after offloading bad debt to the VAMC, based on
preliminary data. This is because government-guaranteed bonds
received in consideration for bad debt must be written off by a
reported 20% each year, which effectively means that the bad bank
only buys time for the banks to write off losses," Fitch says.
The banks are not receiving new capital, and the sovereign's debt
will not rise. But there may still be fiscal costs if this
approach to tackle NPLs is not successful, and if the slow fix
limits the banks' ability to support economic growth.
An alternative to the VAMC is to recapitalise the banking sector,
but this may prove costly. We believe system-wide NPLs to be three
to four times higher than reported by the banks - greater than the
understatement reported by the State Bank of Vietnam (SBV). The
central bank reported that the NPL ratio was 8.8% at end-September
2012, while the banks put this at 4.9%.
Poor transparency, and different accounting and classification
standards, are the main reasons for the discrepancy between our
estimates and the other sources. If NPLs were higher - at 15%,
perhaps - we estimate the cost of recapitalising the banks may
reach 10% of 2013 GDP, assuming 20% recoveries and a Tier 1
capital ratio of 12%.
Banks could still attract equity from overseas investors, although
some may be discouraged by the foreign-ownership cap (30%) and
single-foreign-investor limit (20%). Any rapid growth for the
banks after transferring bad debt to VAMC, but without fresh
capital, could be negative for their credit profile.
Lenders with NPL ratios of 3% and above, as assessed by the SBV,
will be required to sell bad debt to the bad bank. "We expect some
impaired loans will not be transferred without proper
classification and reporting. The SBV has taken steps to improve
transparency, but there has only been an increase in "special
mention" loans. Tighter regulations on classifying debt and
provisioning were recently delayed by one year - to 1 June 2014,"
Fitch says.
Vietnam's 'B+' rating would benefit from greater transparency on
the scale of the problem in the banking sector, and enhanced
confidence that the authorities have the issue in hand, as well as
structural reforms to reduce the chances of a recurrence of asset-
quality problems. The principal constraint on the sovereign rating
is the potential risk to macro-financial stability and public
finances posed by the large and opaque banking sector.
The capacity of the bad bank to buy NPLs is limited by its
VND500bn (USD23m) capital, and its acceptance only of loans which
are collateralised. Nevertheless, the bad bank could help to curb
asset-quality problems and marginally ease liquidity pressure, as
VAMC-issued bonds can be used for central bank funding.
The operations of the VAMC reportedly start July 8, under the
direct control of the SBV.
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
some position in the issuers' public debt and equity securities
about which we report.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR-AP. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Friday's edition of the TCR-AP features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
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S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel
Elaine T. Fernandez, Julie Anne L. Toledo, Frauline S. Abangan,
and Peter A. Chapman, Editors.
Copyright 2013. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000 or Nina Novak at 202-241-8200.
*** End of Transmission ***