/raid1/www/Hosts/bankrupt/TCRAP_Public/130911.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
Wednesday, September 11, 2013, Vol. 16, No. 180
Headlines
A U S T R A L I A
CROSS CITY TUNNEL: On the Brink of Receivership for the 2nd Time
PACIFIC INDUSTRIAL: Moody's Assigns (P)B2 CFR; Outlook Stable
SPOTLESS GROUP: S&P Assigns 'B' Rating; Outlook Stable
TRIMS: New Owner Takes Over Business; Stocks Liquidation Sale Set
VIKING GROUP: Ex-CFO Gets 6-Year Jail Sentence For Fraud
C H I N A
GLORIOUS PROPERTY: Weak Sales Cue Moody's to Lower CFR to Caa1
HENGDELI HOLDING: First Half 2013 Results No Impact on Ba1 CFR
SUNAC CHINA: Land Purchases a Credit Negative Says Moody's
I N D I A
BOTHE WINDFARM: CARE Assigns 'BB+' Rating to INR900cr LT Loans
CTS INDUSTRIES: CARE Assigns 'C' Rating to INR41.81cr LT Loans
DHANA SHREE: CARE Rates INR18.80cr LT Bank Loans at 'BB-'
DIVYANSH INFRACON: CARE Rates INR23.50cr LT Bank Loans at 'BB-'
EDEN TRANSPORT: CARE Assigns 'D' Rating to INR10.15cr LT Loans
GOLDI GREEN: CARE Rates INR18.5cr Bank Loans at 'CARE BB/CARE A4'
INTERNATIONAL TRADING: CARE Rates INR10cr LT Bank Loans at 'BB'
JAI KISAN: CARE Rates INR6.5cr LT Bank Loans at 'CARE B'
MAA TARINI: CARE Assigns 'B' Rating to INR12.9cr LT Bank Loans
MORAJ INFRATECH: CARE Rates INR14.52cr LT Bank Loans at 'B+'
PRINCE SPINNERS: CARE Assigns 'B' Rating to INR27cr LT Loans
SHREE VIJAY: CARE Rates INR51.33cr LT Bank Loans at 'BB'
SHUBHGRAH METALS: CARE Rates INR8cr Loans at 'CARE B/CARE A4'
TANIA INDUSTRIES: CARE Assigns 'BB+' Rating to INR12cr Loans
VALSON INDUSTRIES: CARE Assigns 'BB+' Rating to INR13.55cr Loans
VERDANT LIFE: CARE Assigns 'B+' Rating to INR15.51cr LT Loans
VISHVANATH GINNING: CARE Rates INR6cr LT Bank Loans at 'B'
J A P A N
* JAPAN: Corporate Bankruptcies Drop 15.3% in August
N E W Z E A L A N D
STARPLUS HOMES: Winding Up Process Still a Long Way to Go
P H I L I P P I N E S
* PHILIPPINES: PDIC Seeks More Modes of Liquidation
S O U T H K O R E A
STX GROUP: Chairman Steps Down as Head of Shipbuilding Unit
S R I L A N K A
CEYLEASE LTD: Fitch Upgrades National LT Rating From 'BB+'
X X X X X X X X
* Upcoming Meetings, Conferences and Seminars
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A U S T R A L I A
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CROSS CITY TUNNEL: On the Brink of Receivership for the 2nd Time
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The Sunday Morning Herald, citing Australian Financial Review,
reports that Sydney's Cross City Tunnel is on the brink of
receivership for the second time in seven years, with the road's
owners unlikely to meet a September 30 deadline to refinance the
troubled infrastructure project.
Cross City Tunnel had hoped to refinance a AU$79 million chunk of
debt by the end of the month, but is understood to have run into
difficulties caused by an unpaid $60 million stamp duty bill,
according to The Sunday Morning Herald.
The report notes that the road's shareholders -- Leighton
Holdings, Royal Bank of Scotland and EISER Infrastructure Partners
-- recently defeated the NSW Office of State Revenue and do not
have to pay the bill.
But the potential for an appeal is understood to have ended any
chance of a refinancing, given the project remains incapable of
generating enough traffic to support its total -- borrowings of
AU$600 million, the report notes.
The tunnel's fate rested in the hands of RBS, which also holds the
debt. Sources said a decision from RBS was "imminent" and
receivership was the most likely option. RBS has called in
insolvency firm -- KordaMentha to advise on its options, the
report says.
The report discloses that the financial problems experienced by
the project are another reminder of the private sector's inability
to measure the critical traffic forecasts associated with funding
toll roads.
Talks on Refinancing
The report relays that a Cross City Tunnel spokesman said the
company was still in discussions on a refinancing. An RBS
spokeswoman declined to comment.
It's understood the NSW Office of State Revenue had until Monday
night to appeal the decision, which could affect the refinancing
efforts, the report notes.
RBS, EISER and Leighton bought the road out of receivership in
September 2007, paying AU$700 million, the report recalls.
PACIFIC INDUSTRIAL: Moody's Assigns (P)B2 CFR; Outlook Stable
-------------------------------------------------------------
Moody's Investors Service has assigned a provisional (P)B2
corporate family rating to Pacific Industrial Services BidCo Pty
Ltd. PIS owns the "Spotless" group, which is an integrated
facility services provider in Australia and New Zealand.
At the same time, Moody's has assigned a provisional (P)B1 senior
secured rating to the proposed 1st lien $ Term Loan B ("TLB") and
revolving debt facility (equivalent to around AUD900 million and
AUD200 million respectively) and a provisional (P) B3 senior
secured rating to the proposed 2nd lien $ term loan facility
(equivalent to around AUD250 million).
The loans will be issued by three borrowing entities: 1) PIS, 2)
Pacific Industrial Services US FinCo LLC, which is a newly formed
financial vehicle for the group, and 3) PIS' wholly owned
subsidiary, Spotless Holdings (NZ) Limited ("Spotless NZ") (the
"Borrowers"). The loans are guaranteed by PIS and its subsidiaries
Spotless Group Limited (Australia) ("Spotless Australia") and
Spotless NZ.
This is the first time that Moody's has assigned ratings to PIS.
The outlook on the ratings is stable.
The assignment of a definitive CFR and senior secured term loan
and revolving facility ratings is subject to review of final
documentation and successful close of the transaction. The
proceeds of the issuance will be used principally to repay
existing indebtedness, for specific distributions to shareholders
and to provide working capital.
Ratings Rationale:
"PIS' ratings principally reflect its highly levered capital
structure and evolving capital management strategy," says Mary
Anne Low, a Moody's Analyst. Following the proposed transaction,
we expect financial leverage -- as measured by total debt/EBITDA
(on Moody's adjusted basis) --to step up to around 5.4x from 3.9x
immediately prior to the re-leveraging. Such a highly leveraged
position limits the company's financial flexibility and constrains
its ratings at their current levels.
"Whilst expectations of earnings growth should help reduce
leverage, any improvement in its debt position depends heavily on
its continued ability to improve efficiency and operations, as
well as shareholder expectations of equity returns," adds Low.
The ratings also incorporate the company's ability to execute on
its operational and financial targets, as a result of costs
savings initiatives delivered so far. Moody's believe the extent
of costs savings will reduce over time and EBITDA margin is likely
to be maintained near current levels, but could be slightly
better. This, plus the group's financial leverage, is comparable
to similarly-rated B peers. The ratings incorporate Moody's
expectation that the company will maintain its earnings and
profitability at levels that are appropriate for the current
ratings.
PIS' ongoing business profile reflects its fairly predictable
earnings generation which is underpinned by multi-year contracts.
The group is one of the leading integrated facility service
providers in Australia and benefits from its longstanding
presence, and resultant high client retention rate, which Moody's
expects to continue.
On the other hand, PIS is exposed to adverse economic trends, as
the facility services market is highly fragmented and consists of
end customers from various sectors. Moody's expects volatility
risk to be offset by the company's diversified customer and sector
base.
The B2 CFR also reflects the group's limited geographical
diversification in a competitive industry when compared to other
Moody's B-rated peers, which have broader geographical presence.
PIS earns a majority of its revenues in Australia, albeit this is
countered by its solid position in the domestic market.
The company is 98%-owned by funds managed and advised by Pacific
Equity Partners ("PEP", unrated), which may not be a long term
strategic owner and this is likely to see capital distributions
(subject to covenant limitations) from time to time. As such, the
rating incorporates uncertainty surrounding the group's financial
leverage over time, as shareholder-friendly initiatives could be
taken from time to time, within the confines of the loan
documents, either in the form of the distribution or capital
returns funded by a re-gearing similar to the proposed
transactions.
The stable outlook reflects Moody's expectation for relatively
stable industry conditions in Australia and New Zealand. The
outlook also factors in Moody's expectation that PIS will continue
focusing on organic growth with steady EBITDA margins.
The (P)B1 senior secured rating assigned to the proposed 1st lien
$ TLB and revolving facility reflects a one notch uplift to the
PIS CFR of B2, indicative of its superior secured position and
claim in PIS' capital structure.
The (P)B3 senior secured rating assigned to the proposed 2nd lien
$ term loan reflects a one notch lower rating to the PIS CFR of
B2, indicative of its inferior position and claim in the PIS'
capital structure.
The ratings could be upgraded if there is an establishment of a
track record and evidence of the company's ability to deliver
successfully on its operational and financial targets.
Additionally, there could be upward rating momentum if the company
de-leverages beyond Moody's expectations. An indication of this
improvement is the ability to maintain the Moody's adjusted total
debt/EBITDA ratio below 5.5x on a consistent basis.
On the other hand, the ratings could be downgraded if the
company's performance declines beyond Moody's expectations,
through poor earnings performance or other adverse industry
conditions. Other negative pressures such as ongoing negative free
cash flow or if the company incurs material additional debt to
fund capital investments or equity returns could also negatively
pressure the ratings. An indication of downward pressure would
include an Moody's adjusted total debt/EBITDA ratio measuring
6.5x.
The principal methodology used in this rating was the Global
Business & Consumer Service Industry Rating Methodology published
in October 2010.
PIS is the parent entity of both Spotless Australia and Spotless
NZ, which owns the operating companies of the group ("Spotless").
Spotless is an integrated facility services provider and operates
within four main business segments, namely facilities management,
food & catering, cleaning and laundry services, catering to
various industry end customers. PIS is 98% owned by funds managed
and advised by PEP, the largest private equity firm in Australia
and New Zealand.
SPOTLESS GROUP: S&P Assigns 'B' Rating; Outlook Stable
------------------------------------------------------
Standard & Poor's Ratings Services said that it had assigned its
'B' rating to Australian facility services provider Spotless Group
Ltd. The outlook on the rating is stable. At the same time, S&P
has assigned issue ratings of 'B' to the proposed first-lien
senior secured term loan B facility and revolving capital
facility. The recovery rating on the two facilities is '3',
indicating S&P's expectation of "meaningful" recovery prospects.
S&P has also assigned an issue rating of 'CCC+' to the group's
proposed second-lien secured term loan B facility, reflecting a
recovery rating of '6' and our expectation of "negligible"
recovery prospects.
"The rating on Spotless reflects our view of the group's "highly
leveraged" financial risk profile; the fragmented and competitive
nature of the markets in which it operates; low barriers to entry
in many segments; and the group's limited track record of improved
operating margins," said Standard & Poor's credit analyst Graeme
Ferguson.
Tempering these weaknesses are: Spotless' leading market position
in Australia, its broad capability across a range of business
services, and a high degree of revenue visibility arising from its
contracted revenue base. S&P's 'B' rating is based on a
consolidated assessment of Spotless Group. Spotless' financial
sponsor ownership is an important consideration for the corporate
credit rating on the group. Spotless has been owned by funds
managed or advised by private equity firm Pacific Equity Partner
Ltd. (PEP) since August 2012.
Spotless' "highly leveraged" financial risk profile is a
constraint on the rating. This assessment reflects both the
group's leverage profile following its proposed recapitalization,
as well as the risks associated with the financial objectives of
its private equity owners. S&P assess Spotless' financial
policies to be "very aggressive", which reflects the influence of
the group's financial sponsor. In this regard, part of the
proceeds from the recapitalization will be used to fund a one-off
shareholder distribution. Following the recapitalization, S&P
expects the group's adjusted debt-to-EBITDA to initially be
greater than 7x, and expect a strong fiscal 2014 operating
earnings to reduce leverage to less than 6.5x, largely as a result
of cost savings already implemented.
In calculating Spotless' debt-to-EBITDA, Standard & Poor's makes
various accounting adjustments, the most material of which is
operating leases. S&P also assumes that the group's A$200 million
revolving capital facility is 50% drawn. S&P uses the company's
July 2013 last 12 months' EBITDA, adjusted for the implied
operating lease interest expense. Consequently, Standard & Poor's
adjusted credit metrics are likely to differ from those quoted in
the group's financial reports and company presentations as well as
those used to calculate compliance with loan covenants. S&P also
notes, however, that the group capitalizes a significant
proportion of the group's annual recurring costs, such as
bedsheets, to the balance sheet and amortizes these costs over
several years. S&P has not incorporated any adjustment for these
items in the above debt-to-EBITDA measure.
"In our view, Spotless has a "fair" business risk profile,
underpinned by its strong brand recognition and leading position
in the Australian facilities services market. Spotless is one of
the few facility service providers capable of offering integrated
services across a broad complement of business services. This
allows the group to successfully tender for long-term public-
private partnership contracts, which can extend beyond 20 years
and provide Spotless with good revenue stability and visibility.
In our view, Spotless is well positioned to capitalize on the
ongoing trend toward outsourcing from the corporate and government
sectors. Similarly, an increasing focus on the higher growth
sectors offers potentially higher margins and enhanced growth
prospects for the group in the next few years," S&P said.
Mr. Ferguson added: "The stable outlook reflects our expectation
that the strong market competition and Spotless' substantial fixed
charges will temper efficiency gains and new contract growth.
These factors, together with the financial objectives of the
private equity sponsors, are expected to sustain consolidated
debt-to-EBITDA at more than 6x."
Negative pressure on the rating could arise if the group's
liquidity position were to materially weaken. This could result
from an inability to sustain improved operating margins,
reputational damage, and/or material loss of contracts.
Deterioration of the group's leverage position would also likely
pressure the rating.
Upward rating movement is reliant on a sustained strengthening of
Spotless' EBITDA margin while it maintains market share, and a
sustainable reduction in financial leverage, including S&P's
expectation that consolidated debt-to-EBITDA will remain less than
5x. Given Spotless' ownership by a financial sponsor, any upward
rating movement is likely to be capped within the 'B' category.
TRIMS: New Owner Takes Over Business; Stocks Liquidation Sale Set
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ABC News reports that a buyer has been found for troubled Adelaide
retailer Trims.
According to the report, BRI Ferrier said the new owner would take
over the Trims business name and trademark and wanted to relaunch
the business in the near future.
ABC relates that liquidator Andre Strazdins of BRI Ferrier said
there would be a three-day liquidation sale of Trims stock from
September 13.
"The new owner . . . is planning to relaunch the business in the
near future and has decided not to take the existing stock," the
report quotes Mr. Strazdins as saying. "Proceeds of the sale will
help repay the creditors. If we can realise the potential of all
the stock here then it will go a long way to contributing to the
employees and, as I said, even towards creditors and suppliers.
"This has been a complex administration and liquidation process
which required negotiation with 37 different stock suppliers and
then several groups interested in buying the business."
Trims is a family-owned clothing store. The company was placed in
administration last month owing AUD3.2 million to unsecured
creditors and AUD580,000 in staff wages and entitlements. About
30 staff were laid off in May when the store was forced into
voluntary administration after a retail downturn left it unable to
pay suppliers, AdelaideNow disclosed.
VIKING GROUP: Ex-CFO Gets 6-Year Jail Sentence For Fraud
--------------------------------------------------------
Patrick Caruana at Australian Associated Press reports that the
former chief financial officer of the Viking Group has been jailed
for her part in a scheme which illegally netted the company tens
of millions of dollars.
Viking's former CFO Loukia Bariamis admitted falsifying loan
documents to the Commonwealth Bank in 2009 and 2010, bringing the
company a total of AUD33 million, according to the report.
Ms. Bariamis, 51, of Glen Waverley, overstated by millions of
dollars the amounts of debts owed to the company when she applied
for three loans, the report discloses.
AAP notes that Victorian Supreme Court Justice Kevin Bell on
September 6 sentenced Ms. Bariamis to six years in prison, with a
non-parole period of four years.
According to the news agency, Justice Bell said a number of
factors, including her early guilty plea and ongoing mental health
issues, were brought into account when deciding the sentence.
However, he said Ms. Bariamis' crimes were at the highest end of
the scale, AAP notes.
"White collar crime is not a victimless crime -- your offences
have implications for the bank's shareholders and customers," the
report quotes Justice Bell as saying.
AAP says Ms. Bariamis is currently serving a four-year sentence on
a separate matter for defrauding the Australian Taxation Office of
AUD1.8 million.
Melbourne-based Viking Group was a transport and logistics company
with operations in Queensland, New South Wales, Tasmania and
Western Australia. SmartCompany said McGrathNicol was acting as
receiver over certain assets within Viking Group after being
appointed by an unnamed secured creditor in 2011.
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C H I N A
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GLORIOUS PROPERTY: Weak Sales Cue Moody's to Lower CFR to Caa1
--------------------------------------------------------------
Moody's Investors Service has downgraded Glorious Property
Holdings Limited's corporate family rating to Caa1 from B3.
At the same time, Moody's has downgraded Glorious' senior
unsecured rating to Caa2 from Caa1.
The outlook on both ratings is negative.
Ratings Rationale:
"Glorious' downgrade reflects the increased liquidity risk arising
from its weak sales execution," says Franco Leung, a Moody's
Assistant Vice President and Analyst.
Glorious reported contracted sales of RMB4.65 billion for the
first eight months of 2013, which represent a year-on-year decline
of 40.6%.
Moody's views the fall as significant, considering that during 1H
2012 -- a year ago -- the property market was weak.
Moreover, most other rated developers for 1H 2013 showed robust
sales and the market is now stable.
"And even though Glorious issued bonds in 1H 2013, its liquidity
position has deteriorated further," adds Leung.
The company's cash balance fell to RMB2.9 billion at end-June 2013
from RMB3.3 billion at end 2012. At the same time, short-term debt
rose to RMB8.1 billion from RMB6.1 billion. Cash coverage of
short-term debt, as a result, declined to about 36% from 54%.
Glorious' debt maturity profile remains the weakest among rated
developers. It raised bonds of $400 million in 1H 2013 and the
proceeds were largely used for refinancing its offshore bank
loans.
Its short-term debt accounted for about 47% of total debt, a
situation which adds to refinancing pressure.
"Although Glorious reported improved revenue in 1H 2013, the rise
was from a low base in 1H 2012 and is also low relative to the
total debt of the company," says Leung.
The company reported a significant improvement in revenue to
RMB2.95 billion in 1H 2013 from RMB1.34 billion in 1H 2012. But,
as indicated, such a level is low in the context of gross debt of
RMB17.4 billion.
Furthermore, its gross profit margin dropped significantly to
17.1% for the 12 months ended June 2013 from 23% in FY 2012. This
was due to the recognition of low-margin products presold in 2011-
2012. This low profit has in turn resulted in low EBITDA interest
coverage of around 0.9x, which in turn reduces the company's
financial flexibility.
The negative outlook reflects Moody's concerns that Glorious will
face major difficulty in managing its liquidity position if there
is no significant improvement in sales execution or other remedial
actions.
The ratings could be downgraded if Glorious shows signs of an
inability to meet its payment obligations.
An upgrade is unlikely in the near term, given Glorious' liquidity
challenges.
The principal methodology used in this rating was the Global
Homebuilding Industry Methodology published in March 2009.
Glorious Property Holdings Limited is a medium-sized residential
property developer based in Shanghai. The company has expanded to
eastern and northern China. At end-June 2013, it had a land bank
with a gross floor area ("GFA") of around 15.8 million square
meters in Shanghai, Beijing, Tianjin, and in several second-tier
cities in the Yangtze River Delta and northeast China. Glorious
listed on the Stock Exchange of Hong Kong in 2009. Its major
shareholder, Mr. Zhang Zhi Rong, owns 68.39% and also has a
shipbuilding company listed in Hong Kong.
HENGDELI HOLDING: First Half 2013 Results No Impact on Ba1 CFR
--------------------------------------------------------------
Moody's Investors Service says that Hengdeli Holding Limited's 1H
2013 results, despite a 17.6% year-on-year drop in EBITDA, have no
immediate impact on its Ba1 corporate family rating and senior
unsecured bond rating, and their stable outlook.
"Hengdeli's weaker earnings for 1H 2013 reflected the overall
slowdown in China's premium watch market and rent increases after
lease renewals for its key flagship stores in Hong Kong. Despite
these challenges, the company has maintained strong liquidity,
improved its capital structure by reducing its reliance on bank
loans, and strategically shifted its growth focus to mid-end
products which have better prospects than high-end products, "
says Alan Gao, a Moody's Vice President and Senior Analyst.
"In light of the company's deleveraging and expected stabilizing
performance, its lease adjusted debt/EBITDA will remain at 4.5x-
5.0x and EBITDA/interest above 4.5x in 2013. These credit metrics
remain consistent with its rating level," says Gao.
Premium watch retailing remained the largest revenue generator,
contributing 72% of total revenue in 1H 2013. Sales on the
Mainland, which represented 59% of total retail sales, only grew
1% year-on-year, mainly due to a 17.6% drop in high-end sales.
The weak performance in high-end watch products was offset by
13.9% growth in mid-end products, reflecting the shift of focus
onto mid-end products in Mainland China.
Sales in Hong Kong, which contributed 33% of total retail sales
and around 63% of high-end sales, still fared well with 14%
growth.
The geographic diversification of its store portfolio is a key
factor which helps minimize earnings volatility in the current
economic slowdown.
EBITDA margin fell to 10% in 1H 2013 from 13.4% in 1H 2012, mainly
due to 1) a 2.2% gross margin contraction as the company offered
more discounts, particularly for high-end watches; and 3) a 17.6%
increase in rent as a few flagship stores in Hong Kong renewed
their leases.
However, Moody's believes that Hengdeli's EBITDA margin will
remain stable in 2H 2013 as this year's cost increases occurred
mainly in 1H 2013.
Moody's expects Hengdeli to generated RMB1.2 billion EBITDA in
2013, down 10% year-on-year.
The company has pro-actively reduced leverage. It paid down RMB900
million in bank loans in 1H 2013. When it fully redeems the RMB1.7
billion in outstanding convertible bonds which can be put by
investors in October, Moody's expects total gross debt to fall to
RMB3.4 billion at end-2013 from RMB4.2 billion now.
Liquidity remains sound. Even after the redeeming the convertible
bonds with its own cash balance, Moody's expects Hengdeli to
maintain around RMB1.4 billion in cash, fully covering the RMB1.1
billion in short-term debt.
The principal methodology used in this rating was the Global
Retail Industry Methodology published in June 2011.
Founded in 1997 and headquartered in Hongkong, Hengdeli Holding
Limited is China's largest retailer and distributor of fine and
luxury watches with over 462outlets across Mainland China, Hong
Kong and Taiwan at end-June 2013. Mr. Zhang Yuping and his family
are the single largest shareholder with a 36.26% interest. It
listed on the Stock Exchange of Hong Kong in 2005.
SUNAC CHINA: Land Purchases a Credit Negative Says Moody's
----------------------------------------------------------
Moody's Investors Service says that Sunac China Holdings Limited's
recent active land acquisition is credit negative, despite the
company's better-than-expected contract sales.
"A sustained momentum with respect to acquisitions could
eventually weaken the company's liquidity position and raise its
debt leverage which could in turn affect its Ba3 corporate family
rating and stable outlook," says Franco Leung, a Moody's Assistant
Vice President and Analyst.
On September 4, 2013, Sunac successfully bid for a plot of land in
Beijing at a total cost of RMB4.3 billion. The plot of land has a
gross floor area of around 59,000 square meters, which means an
average land cost of around RMB73,100 per square meter. This price
is one of the highest recorded in the history of land auctions in
Beijing.
Sunac's contracted land acquisitions totaled about RMB17.3 billion
so far this year, representing 63% of its RMB 27.5 billion in
contracted sales achieved in the first eight months of 2013; much
more than the RMB12.4 billion that it recorded for the full year
in 2012, and higher than the estimated historical average of 40%-
45% of contracted sales committed on new land.
On the other hand, Moody's notes that Sunac has a good track
record with respect to quick development and sales of new
projects. These new projects, which could increase the company's
financial risk, may not significantly increase execution risk, as
they are largely situated in the existing footprints of the
company.
"However, Sunac's aggressive bidding for new projects could
increase the risk of a profit margin squeeze and reduce its
flexibility in pricing over the next one to two years, if the
market corrects," adds Leung, who is also Moody's Lead Analyst for
Sunac.
The land cost of its latest Beijing project, at RMB73,100 per
square meter, is much higher than Sunac's historical average land
cost of around RMB6,000 per square meter as of end-2012.
Moreover, projects located nearby have been selling for about
RMB70,000-RMB80,000 per square meter, albeit a different product
mix and market positioning.
Although the new Beijing project is situated in a better location
than others, the increased price risk and speculative elements in
this acquisition could pressure its rating if the company
continues with this approach.
Moody's estimates the average land cost for Sunac's land purchase
this year at around 20%-25% higher than that of its land bank as
at end 2012. This cost increase over its average selling price
increase implies an increased risk of a profit margin squeeze and
a decline in pricing flexibility over the next one to two years.
Moody's notes that Sunac reported a significant decline in its
gross margin to 20% in 1H 2013 from 31% recorded in 2012, mainly
because of (1) the recognition of low margin projects acquired
from Greentown China Holdings Ltd (B1 positive); and (2) the
increase in the fair value of its acquired projects, which
constitutes part of the cost of sales upon delivery.
Apart from strong sales execution, Sunac's strong liquidity --
with cash-on-hand of RMB14.5 billion as at end June 2013 --
supports its current Ba3 corporate family rating and stable
outlook.
But, such a strong liquidity position could change if the company
continues with its aggressive land acquisition activities.
The principal methodology used in these ratings was the Global
Homebuilding Industry Methodology published in March 2009.
Sunac China Holdings Limited is an integrated residential and
commercial property developer, with ongoing or completed projects
in Beijing, Tianjin, Shanghai, Chongqing and Hangzhou. The company
develops a wide range of properties including high-rise and mid-
rise residences, detached villas, townhouses, retail properties,
offices and car parks.
Sunac was incorporated in the Cayman Islands on April 27, 2007 and
listed on the Hong Kong Exchange on October 7, 2010. At end of
June 2013, it owned 51 projects and had a land bank of 16.5
million square meters.
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BOTHE WINDFARM: CARE Assigns 'BB+' Rating to INR900cr LT Loans
--------------------------------------------------------------
CARE assigns 'CARE BB+' rating to the bank facilities of Bothe
Windfarm Development Private Limited.
Amount
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 900 CARE BB+ Assigned
Rating Rationale
The rating assigned to Bothe Windfarm Development Private Limited
is tempered by relatively large size of the project and exposure
to project implementation risk, pending execution of long term
power off-take agreements and exposure of the revenues to
variability of wind speed and its consequent impact on electricity
generation. The rating is also constrained by exposure to likely
counterparty credit risk associated with Maharashtra State
Electricity Distribution Company Limited as the company intends to
sign the Power Purchase Agreement (PPA) at preferential tariff.
However the rating positively factors in the experience of the
promoters in setting up and operating wind power projects, long
term availability of quality wind data from 11 wind masts,
financial support from Morgan Stanley Infrastructure Partners LLP
and receipt of major statutory and non- statutory clearances for
the project. The rating also factors in the Government-led reforms
and incentives provided to encourage investments in renewable
power space, reputed equipment supplier for wind energy generators
and satisfactory ongoing execution of the project.
Timely completion of the project without any time and cost
overrun, firm long-term off-take arrangement for sale of power and
fructification of the envisaged Plant Load Factor (PLF) levels to
achieve the targeted power generation and revenues remain key
rating sensitivities.
Incorporated in June 2011, Bothe Windfarm Development Private
Limited (Bothe) is a wholly owned special purpose vehicle set up
by Surajbari Windfarm Development Private Limited (Surajbari), for
the development of 198 MW greenfield wind power project at Bothe
and Sripalvan villages in the Satara district of Maharashtra. The
total estimated project cost is INR1,268 crore (INR6.40 crore per
MW) to be funded at a debt-equity ratio of 68:32. Of the equity
amount, 50% will be funded through fully convertible Debentures
(FCD). These FCDs will be convertible into fully paid up equity
shares of Bothe. The project comprises of 97 wind energy
generators (WEG) to be set up in two phases, with installation of
40 and 57 WEGs in Phase I and Phase II respectively. Bothe would
be sourcing WEGs from Vestas Wind Technology India Private Limited
(Vestas, rated CARE A-/ CARE A2+) and Suzlon Energy Limited. The
entire project is scheduled to be commissioned from January 1,
2014.
CTS INDUSTRIES: CARE Assigns 'C' Rating to INR41.81cr LT Loans
--------------------------------------------------------------
CARE assigns 'CARE C' and 'CARE A4' ratings to the bank facilities
of CTS Industries Limited.
Amount
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 41.81 CARE C Assigned
Short-term Bank Facilities 2.00 CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities of CTS Industries
Limited are constrained by its small scale of operations, industry
and client concentration risk, working capital intensive nature of
business and weak financial risk profile marked by a declining
trend of revenue, moderate capital structure and elongated
operating cycle. However, the ratings derive strength from the
experience of the promoters, its long standing relationship with
reputed clientele and implementation of Corporate Debt
Restructuring (CDR) package.
The ability to improve the profitability with an increase in scale
of operations and solvency parameters along with the effective
management of working capital remain the key rating sensitivities.
CTS Industries Ltd, incorporated in May 2003, was promoted by
brothers, Mr. Ashok Kumar Tulsyan and Mr. Purushottam Kumar
Tulsyan along with their friend, Mr. Sanjay Choudhury, all from
Kolkata, West Bengal. CTS commenced its operation in 2006 and was
initially engaged only in the trading of petrochemical products
such as parafin wax, slack wax and pesidue wax. In 2006, Annapurna
Global Ltd, an associate company of CTS which was involved in the
manufacturing of wax was merged into it. At present, the company
operates in three segments, ie, trading of petrochemical products,
manufacturing of pre-stressed concrete (PSC) pole and supplying
crushed stone/ aggregates to the construction segment. The company
has six plants for stone crushing (aggregates, dust and boulders)
located at various places in Jharkhand and Bihar. Furthermore, it
has a manufacturing facility for PSC poles at Begusarai (Bihar)
with an available capacity of 360 poles per day.
During FY12 (refers to the period April 1 to March 31), CTS
registered a total income of INR44.4 crore (INR64.4 crore in FY11)
with PBILDT and PAT of INR15.9 crore and INR0.5 crore (INR13.8
crore and INR1.5 crore in FY11), respectively. As per the
estimated results for FY13, CTS has reported a PBT of INR0.5 crore
on a total income of INR36.9 crore.
DHANA SHREE: CARE Rates INR18.80cr LT Bank Loans at 'BB-'
---------------------------------------------------------
CARE assigns 'CARE BB-' to the bank facilities of Dhana Shree
Developers.
Amount
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 18.80 CARE BB- Assigned
The rating assigned by CARE is based on the capital deployed by
the partners and the financial strength of the firm at present.
The rating may undergo a change in case of withdrawal of capital
or the unsecured loans brought in by the partners in addition to
the financial performance and other relevant factors.
Rating Rationale
The rating assigned to the bank facilities of Dhana Shree
Developers is constrained by moderate project execution risk, high
saleability and regulatory risk on account of pending occupancy
certificate from the Municipal Corporation of Greater Mumbai
(MCGM). The rating is further, constrained by constitution of the
entity being a partnership firm and inherent industry risk
characterized by cyclicality associated with the real estate
industry.
The rating, however, derives strength from the experienced
partners in the real estate industry. The ability of DSD to timely
execute the ongoing project without any cost overrun, obtain the
occupancy certificate and, thereby, realize funds and also timely
monetize the balance inventory are the key rating sensitivities.
Dhana Shree Developers was established in 2000 by Mr. Dnyaneshwar
Dabhole, Mr. Vijay Mehta, Mr. Sameer Shah and Mr. Balwantrai
Mehta. The firm has been primarily involved in development of
residential and commercial projects in Mumbai. Currently, DSD is
developing two residential projects in Mumbai namely Dhana Shree
Heights (Stilt + 14 floors) in Andheri and Dhana Shree Pearl
(Stilt + 14 floors) in Taloja.
Dhana Shree Heights, a redevelopment project, commenced
construction in March 2009, and was at completion stage as on
April 22, 2013. The total cost of the project was INR33.90 crore,
funded in the ratio of 0.55: 0.15: 0.30 (debt: equity: customer
advances).
Other project of DSD namely Dhana Shree Pearl is a residential
project comprising of 104 flats with total saleable area of around
0.76 lakh square feet (lsf) and is expected to be complete by
March 2014. The firm has estimated total cost of the project at
INR18.02 crore to be funded in the ratio of 0.45: 0.24: 0.31
(debt: equity: customer advances); out of which, the firm has
already incurred cost to the tune of INR10.91 crore (comprising
60.54% of the overall cost), which was funded through customer
advances of INR2.34 crore (out of INR5.55 crore), entire equity
(of INR4.32 crore) and balance from debt (out of INR8.15 crore).
DIVYANSH INFRACON: CARE Rates INR23.50cr LT Bank Loans at 'BB-'
---------------------------------------------------------------
CARE assigns 'CARE BB-' rating to the bank facilities of Divyansh
Infracon Pvt Ltd.
Amount
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 23.50 CARE BB- Assigned
Rating Rationale
The rating assigned to the bank facilities of Divyansh Infracon
Pvt Ltd is primarily constrained by the limited experience of the
promoters in undertaking a large size real estate project,
execution risk associated with its on-going residential real
estate project, exposure to local demand-supply dynamics and
inherent risks associated with the real estate industry. The
rating, however, does draw comfort from the acquisition of land
and requisite project approvals being obtained and moderate
booking status for the project.
Going forward, the ability of the company to execute the project
as per the schedule, timely sale of the project space at envisaged
prices, along with a timely realization of customer advances shall
be the key rating sensitivities. Furthermore, the company's
ability to sustain any adverse changes in the regulatory
guidelines shall also be a key rating sensitivity.
Incorporated in October 2010, Divyansh Infracon Pvt Ltd is a
private limited company. DIP is undertaking a residential project
under the name 'Divyansh Pratham' in Ghaziabad, Uttar-Pradesh.
The project comprises a residential block of two residential
towers with 207 residential flats in a mix of two-BHK (Bedroom,
Hall & Kitchen), three-BHK flats and four-BHK flats.
For FY12 (refers to the period April 1 to March 31), DIP achieved
a total operating income of INR8 crore with PAT of INR0.45 crore.
DIP has reported a total income of INR25.03 crore with PAT of
INR1.37 crore in FY13 (based on unaudited results).
EDEN TRANSPORT: CARE Assigns 'D' Rating to INR10.15cr LT Loans
--------------------------------------------------------------
CARE assigns 'CARE D' rating to the bank facilities of Eden
Transport Private Limited.
Amount
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 10.15 CARE D Assigned
Rating Rationale
The rating of Eden Transport Private Limited factors in the
ongoing delays in debt-servicing on account of the stressed
liquidity position of the company.
Eden Transport Private Limited, incorporated on July 16, 2010, is
engaged in the business of bus transport services in Bihar. EDPL
is promoted by the Eden City Group based out of Kolkata. EDPL
launched the Eden Express intercity bus service in January 2011 to
provide bus services for travelling between cities in Bihar. Eden
Express began its operations with the Patna-Chapra-Sawan and
Patna-Muzaffarpur routes. Currently, the company operates with a
fleet of 118 buses, which operate through 7 different routes of
Patna.
EDPL is a subsidiary of Eden Realty Ventures Pvt Ltd, promoted by
Mr. Indrajit De and Mr. Sachidanand. ERVPL is engaged in the
business of real estate development in and around Kolkata.
During FY12 (refers to the period April 01 to March 31), ETPL
reported a net loss (after deferred tax) of INR8.52 crore (INR1.14
crore in FY11) on a total operating income of INR10.26 crore
(INR0.79 crore in FY11). As per the FY13 provisional results, the
company achieved a net loss of INR7.43 crore on a total income of
INR3.41 crore.
GOLDI GREEN: CARE Rates INR18.5cr Bank Loans at 'CARE BB/CARE A4'
-----------------------------------------------------------------
CARE assigns 'CARE BB' and 'CARE A4' ratings to the bank
facilities of Goldi Green Technologies Private Limited.
Amount
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term/Short-term 18.50 CARE BB/CARE A4
Bank Facilities Assigned
Rating Rationale
The ratings assigned to the bank facilities of Goldi Green
Technologies Private Limited are primarily constrained on account
of the limited experience of the promoters, short track record
of operations in a competitive and fragmented solar energy
industry and vulnerability of profitability to fluctuations in raw
material prices and foreign exchange rates.
The ratings, however, favorably take into account the resourceful
promoters, technical competence, moderate order book position and
the capital structure.
The ability of GGTPL to increase its scale of operations with an
improvement in profitability and capital structure while achieving
the envisaged capacity utilization in light of raw material price
volatility are the key rating sensitivities.
Incorporated in the year 2011, GGTPL was promoted by Mr Ishverbhai
Dholakiya, Mr Prabhudas Dholakiya and Mr Bharatkumar Bhut. GGTPL
is engaged in the business of manufacturing photovoltaic (PV)
solar modules/panels wide ranging from 3 Watt (W) to 300W using
multicrystalline cells. GGTPL commenced commercial operations in
August 2012 with an installed capacity of 10MW (semi-automated) at
its plant located near Surat, Gujarat. Furthermore, GGTPL
completed the remaining project which increased its installed
capacity to 35MW (25MW automated) which became operational from
January 2013. The total cost of the project for installing 35MW
was INR15 crore which was funded through a term loan of INR9 crore
and the balance through promoters' contribution.
As per the provisional results for FY13 (FY refers to the period
from April 1 to March 31), GGTPL reported a total operating income
of INR9.10 crore with a PAT of INR0.59 crore.
INTERNATIONAL TRADING: CARE Rates INR10cr LT Bank Loans at 'BB'
---------------------------------------------------------------
CARE assigns 'CARE BB' rating to the bank facilities of
International Trading Corporation.
Amount
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 10 CARE BB Assigned
Rating Rationale
The rating assigned to the bank facilities of International
Trading Corporation is constrained by thin profit margin on
account of trading nature of operations, susceptibility of profit
margin to volatility in prices of traded commodity, high leverage
levels and working capital intensive nature of operations. The
rating also considers a highly competitive nature of the industry.
The rating, however, favorably considers the proprietor's
experience, long track record of operations of the entity in the
trading business and increase in the scale of operations in the
past four years. Going forward, the ability of the firm to improve
the operating profit margin, while increasing the scale of
operations and effectively manage its working-capital requirements
would be the key rating sensitivities.
International Trading Corporation, a proprietorship firm is
engaged in the business of trading of various Iron and Steel
Products such as HR (Hot Rolled) Plates, Sheets and Coils of
various sizes and grades. The firm is based out of Chennai and was
established in 1994 by Mr. Naval Kishore Agarwal (Proprietor). He
is supported by his father Mr Bankatlal Agarwal and other family
members, who take care of the administrative activities of the
business. The proprietor along with his brother and other family
members also run two sister concerns, namely, International Steel
Processors and International Steel Exchange Private Limited.
During FY13 (refers to the period April 1 to March 31), the firm
has registered PAT of INR2.84 crore on a total operating income of
INR329.33 crore.
JAI KISAN: CARE Rates INR6.5cr LT Bank Loans at 'CARE B'
--------------------------------------------------------
CARE assigns 'CARE B' rating to the bank facilities of Jai Kisan
Udhyog.
Amount
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 6.50 CARE B Assigned
The rating assigned by CARE is based on the capital deployed by
the proprietor and the financial strength of the entity at
present. The rating may undergo a change in case of withdrawal of
the capital or the unsecured loans brought in by the proprietor in
addition to the financial performance and other relevant factors.
Rating Rationale
The rating assigned to the bank facilities of Jai Kisan Udhyog is
constrained by project execution risk and constitution of the
entity being proprietorship in nature. The rating is further
constrained by inherent industry risk marked by susceptibility of
operating margins to volatile raw material prices, operations in
the highly fragmented industry, seasonality associated with cotton
availability and regulatory risk.
The rating factors in the benefit derived from the experience of
proprietor and favorable location of the unit. The ability of JKU
to timely complete the project without any cost overrun and,
thereby, achieve accruals as envisaged are the key rating
sensitivities.
M/s Jai Kisan Udhyog, was established in the year 2013, as a
proprietorship concern by Mr. Rajendrasingh Tanwar. The entity is
setting up a cotton ginning and pressing plant at Kasarawad,
District - Khargone in Madhya Pradesh. The project started on
March 06, 2013, and is expected to commence commercial operations
from October 01, 2013. The cost of the project is estimated at
INR5.82 crore, to be funded through promoter's contribution in the
form of capital of INR2.42 crore, unsecured loans of INR0.90 crore
from friends & relatives, and the balance through term loan of
INR2.50 from bank. As on August 22, 2013, the entity has spent
INR2.99 crore, 51% of total project cost, which was funded through
promoter's contribution in the form of capital of INR1.51 crore
and INR1.48 crore through bank term loan.
MAA TARINI: CARE Assigns 'B' Rating to INR12.9cr LT Bank Loans
--------------------------------------------------------------
CARE assigns 'CARE B/CARE A4' ratings to the bank facilities of
MAA Tarini Industries Ltd.
Amount
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 12.9 CARE B Assigned
Short-term Bank Facilities 0.5 CARE A4 Assigned
Rating Rationale
The aforesaid ratings remain constrained by the relatively small
size of operations along with limited geographic reach, lack of
backward integration vis-a-vis volatility in raw material prices,
risks associated with implementation of large ongoing projects,
low capacity utilization levels and limited shock absorbing
capacity amidst low profit levels. The ratings are further
constrained on account of high degree of competition in the
sector, which is further fragmented and cyclical in nature. The
ratings however draw strength from the experience of the current
promoters in the steel industry, strategic location of its
manufacturing facilities and favorable capital structure.
The ability of the company to successfully complete its ongoing
projects, manage its working capital effectively and improve its
profitability would remain the key rating sensitivities.
Maa Tarini Industries Ltd. was incorporated in August 2000 and was
originally promoted by Mr. Hanuman Prasad Agarwal, Mr. Hanuman
Khedaria and Mr. Pradeep Jain of Rourkela. Currently, it has a
sponge iron unit of 48,000 TPA (Tonnes Per Annum) and ingot
manufacturing facility of 21,000 TPA, along with an iron ore
crushing unit of 80 TPD (Tonnes Per Day). However, on account of
operational non-viability of its ingot facility (due to high power
costs and absence of any captive source of power of MTIL), the
same was given on lease to a third party since January 2008, which
expired in August 2011 and has not been further renewed.
In June 2012, Mr. Piyush Sengar of Tathagat group of Delhi took
over the management of MTIL through Tathagat Exports Pvt. Ltd. As
on March 31, 2013, TEPL held 45.27% of the shares of MTIL. The
balance stake is also proposed to be taken over by TEPL from the
original promoters by FY14 (refers to the period April 1, 2013 to
March 31, 2014).
On total income of INR55.1 crore, MTIL earned a PAT of INR0.9
crore in FY13 (refers to the period April 1, 2012, to March 31,
2013).
MORAJ INFRATECH: CARE Rates INR14.52cr LT Bank Loans at 'B+'
------------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Moraj
Infratech Pvt. Ltd.
Amount
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 14.52 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Moraj Infratech
Private Limited is constrained by high project execution and
funding risk, moderate debt servicing capabilities and inherent
industry risk characterized by cyclicality associated with the
real estate industry.
The rating however, derives strength from the experienced
promoters with past track record in the real estate industry and
favorable location of the project.
MI's ability to complete the project in timely manner without any
cost overrun and timely realization of customer advances for
property already sold would be the key rating sensitivities.
Incorporated in 1994 by Mr Mohan Gurnani, Moraj Infratech Pvt.
Ltd. is primarily involved in the development of residential and
commercial projects in Navi Mumbai and Nagpur. MI is currently
developing a residential project at Nagpur, viz. 'Waterfall
Gateway' with an estimated cost of INR95.52 crore envisaged to be
funded in a debt, promoters contribution (equity & unsecured
loans) and customer advances mix of 15:37:48 respectively.
As on July 31, 2013 the company has incurred INR68.45 crore
(approximately 72%) of the total project cost, funded through
promoters contribution of INR31.31 crore (45.75%), term-loan of
INR14.52 crore (21.21 %) and customer advances to the tune of
INR22.34 crore (32.64%). Moreover, the company also has an
entirely completed residential project at Koparkhairane viz.
'Casa Grand'.
PRINCE SPINNERS: CARE Assigns 'B' Rating to INR27cr LT Loans
------------------------------------------------------------
CARE assigns 'CARE B' and 'CARE A4' rating to the bank facilities
of Prince Spinners Private Limited.
Amount
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 27 CARE B Assigned
Short-term Bank Facilities 2 CARE A4 Assigned
Long-term/Short-term Bank 5.50 CARE B/CARE A4
Facilities Assigned
Rating Rationale
The ratings assigned to the bank facilities of Prince Spinners
Private Limited are constrained primarily on account of its short
track record of operations with presence in the highly fragmented
textile industry with limited presence in textile value chain and
its weak financial risk profile marked by moderate profitability,
leveraged capital structure and modest debt coverage indicators.
The ratings are further constrained by project stabilization risk
for ongoing debt-funded capex, coupled with susceptibility of
operating margins to raw-material price fluctuation risk.
These constraints far offset the benefits derived from the vast
experience of the promoters in the textile industry, location
advantage on account of its presence in cotton producing belt of
Gujarat and availability of government incentives to the textile
industry.
The ability of PSPL to increase its scale of operations with
improvement in the overall financial risk profile and timely
completion and stabilization of its on-going debt-funded capex are
the key rating sensitivities.
Ahmedabad-based (Gujarat) PSPL was incorporated as a private
limited company in June 2006, by Mr. Haiderali Jafarbhai Makhani,
along with four other directors with the object of manufacturing
of cotton yarn. PSPL manufactures cotton combed hosiery yarn with
an average count of 30s.
PSPL's manufacturing facility is located at Amreli (Ahmedabad).
The commercial operation of PSPL recently commenced in July 2012,
with an installed capacity of seven Metric Tonne (MT)/day
with seven ring frames as on March 31, 2013.
As per the provisional results for FY13 (refers to the period
July 1 to March 31), PSPL reported a total operating income (TOI)
of INR31.47 crore and Profit after Tax (PAT) of INR1.12 crore.
SHREE VIJAY: CARE Rates INR51.33cr LT Bank Loans at 'BB'
--------------------------------------------------------
CARE assigns 'CARE BB' rating to the bank facilities of Shree
Vijay Aqua Feeds Private Limited.
Amount
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 51.33 CARE BB Assigned
Rating Rationale
The rating assigned to the bank facilities of Shree Vijay Aqua
Feeds Private Limited is constrained by the lack of operational
track record, dependence on climatic conditions and aquaculture
which is exposed to water-borne diseases and working capital
intensive nature of the business. The aforesaid constraints are
partially offset by the experience of the promoters in the similar
line of business, successful completion of the project, presence
in the aquaculture zone of West Godavari District in Andhra
Pradesh and proximity to raw material sources.
The ability of the company to stabilise the operations, achieve
the projected revenue and profitability levels and manage the
working capital requirements efficiently are the key rating
sensitivities.
Shree Vijay Aqua Feeds Private Limited was incorporated on
November 15, 2010, with the commencement of operations on May 29,
2013. The company is engaged in the production and sale of Fish
and Shrimp feed, with the manufacturing plant located at
Saripalle, West Godavari district, Andhra Pradesh. The project was
implemented at a total cost of INR118 crore funded through a debt
to equity mix of 1.07x. The company is promoted by Ms NVR Sujata
and Mr BK Murthy who have a decade of experience in the similar
line of activity. The installed capacity of fish feed is 158.4
Metric Tons per Annum (MTPA) and 36 MTPA of Shrimp feed.
SHUBHGRAH METALS: CARE Rates INR8cr Loans at 'CARE B/CARE A4'
-------------------------------------------------------------
CARE assigns 'CARE B' and 'CARE A4' ratings to the bank facilities
of Shubhgrah Metals Private Limited.
Amount
Facilities (INR crore) Ratings
----------- ----------- -------
Long/Short-term Bank 8 CARE B/CARE A4
Facilities Assigned
Rating Rationale
The ratings assigned to the bank facilities of Shubhgrah Metals
Private Limited (SMPL) are primarily constrained on account of its
nascent stage of operations with weak solvency position, its
presence in the highly competitive and fragmented industry and
vulnerability of margins to fluctuation in the raw material prices
and foreign exchange rates.
The ratings, however, favorably take into account the vast
experience of promoters in the diversified businesses.
The ability of the company to stabilize the operations of the
newly setup business with achievement of envisaged levels of
income and profitability would remain the key rating sensitivity.
Udaipur-based (Rajasthan) SMPL incorporated in October 2012, was
promoted by Mr. Babulal Motawat, Mr Rohit Motawat and Mr Pankaj
Kothari. SMPL has commenced commercial operations from December
2012, and is engaged in the trading of aluminum scraps. It imports
aluminum scraps mainly from Dubai, Kuwait and Saudi Arab, and
sells in all over India mainly in the states of Gujarat,
Maharashtra, Delhi, Haryana and Rajasthan. It sells scraps
directly to end-users as well as through agents. It has around
eight agents located in different states of India.
Within four months of operations, as per provisional results of
FY13, SMPL has reported Total Operating Income (TOI) of INR0.40
crore with PBILDT margin of 0.51% and PAT margin of 0.08%.
TANIA INDUSTRIES: CARE Assigns 'BB+' Rating to INR12cr Loans
------------------------------------------------------------
CARE assigns 'CARE BB+/CARE A4+' ratings to the bank facilities of
Tania Industries Pvt Ltd.
Amount
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 12 CARE BB+ Assigned
Short-term Bank Facilities 10.70 CARE A4+ Assigned
Rating Rationale
The ratings assigned to Tania Industries Pvt Ltd are constrained
by low profit margins inherent to the solvent extraction business,
product concentration risk and lack of integrated operations.
Furthermore, the ratings are constrained by the agro-based nature
of products, volatility in availability and prices of raw material
and small scale of operations. However, the ratings take into
consideration the rich experience of the promoters in the
company's line of business, moderate overall financial risk
profile of TIPL and low operating cycle.
The ability of TIPL to improve the profitability margins and
achieve integration in line of operations or diversify its product
offerings are the key rating sensitivities.
Tania Industries Pvt Ltd incorporated in 1980 as Tania Investments
Pvt Ltd, was subsequently renamed to its current name in 2002.
Earlier, the company was functioning as financial investments and
share trading company later it changed its area of operations and
began trading of oil and oil seeds in 1998. In October 2003, the
company acquired a solvent extraction plant at Saoner, Nagpur.
TIPL is engaged in the extraction of soyabean oil (crude) by
solvent extraction and manufacturing of De-oiled Cake (DOC). The
plant operates at a capacity of 400 tonnes per day (TPD), which
was enhanced from 200 TPD post acquisition. In FY12, the company
constructed a warehouse having soyabean storage capacity of 7,000
MT to procure quality and abundant soyabean during peak
season of harvesting. The company supplies crude soyabean oil to
the refineries and DOC to traders and cattle feed manufacturers in
India.
TIPL has reported PAT of INR2.77 crore on Total operating income
of INR237.16 crore in FY12.
VALSON INDUSTRIES: CARE Assigns 'BB+' Rating to INR13.55cr Loans
----------------------------------------------------------------
CARE assigns 'CARE BB+ and CARE A4+' ratings to the bank
facilities of Valson Industries Limited.
Amount
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 13.55 CARE BB+ Assigned
Long/Short-term Bank 1.75 CARE BB+/CARE A4+
Facilities Assigned
Rating Rationale
The ratings assigned to the bank facilities of Valson Industries
Limited are constrained by its modest scale of operations, decline
in operating profitability and moderate debt coverage indicators.
The ratings are further constrained by VIL's profitability margins
being exposed to volatility in raw material prices and its
presence in a fragmented industry leading to low pricing power.
The ratings factor in the benefit derived from the vast experience
of the promoters in the textile business, fiscal benefits in the
form of sales tax exemption & interest subsidies and diversified &
reputed clientele base. The ratings further factor in the moderate
capital structure.
The ability of VIL to achieve the envisaged sales and improve the
profitability margins amidst the intense competition are the key
rating sensitivities. Furthermore, going forward, any debt-funded
capex might also impact the credit profile of VIL.
Valson Industries Limited is a flagship company of the Mutreja
Group, incorporated as a private limited company in the year 1983
and converted into a public limited company in the year
1994. In the year 1994, the equity shares of VIL were listed in
the Bombay Stock Exchange. VIL is primarily engaged in the
manufacturing and dyeing of polyester yarn & dyeing of cotton
yarns.
VIL has also backward integrated into texturising and twisting.
Over the years, VIL has established and expanded its polyester
texturised yarn (PTY), twisted yarn and dyeing capacities. PTY
capacity has expanded to 5,200 MT in FY13 (refers to the period
April 1 to March 31) from 4,500 MT in FY10; and twisted yarn
capacity has expanded to 4,500 MT in FY13 from 3,400 MT in FY10.
Furthermore, the dyeing capacity has expanded to 6,200 MT in FY13
from 5,900 MT in FY10. VIL has three texturising and twisting
plants located at Silvasa, Dadra and Silli and the two dyeing
plants are located at Vapi.
During FY13 (provisional), VIL posted a total income of INR93.92
crore (vis-a-vis INR83.46 crore in FY12) with a PAT of INR0.88
crore (vis-a-vis INR1.17 crore in FY12).
VERDANT LIFE: CARE Assigns 'B+' Rating to INR15.51cr LT Loans
-------------------------------------------------------------
CARE assigns 'CARE B+' and 'CARE A4' to the bank facilities of
Verdant Life Sciences Private Limited.
Amount
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 15.51 CARE B+ Assigned
Short-term Bank Facilities 4.00 CARE A4 Assigned
Rating Rationale
The ratings assigned to Verdant Life Sciences Pvt Ltd are
constrained by high product concentration and revenue
concentration with few clients, and debt funded capex plans. The
ratings favorably factor in the experience of the management team,
World Health Organization Good Manufacturing Practices certified
plant and improvement in revenues over the period of last three
years ending FY13 (refers to the period April 1 to March 31). The
ability of the company to diversify the product base and client
concentration, maintain profitability will be the key rating
sensitivities.
Verdant Life Sciences Pvt Ltd was incorporated in June 2008 by
Mr. U Amarnath and Mr. V Satyanarayana Murthy with its
manufacturing facility at Jawaharlal Nehru Pharma City,
Vishakhapatnam, with an installed capacity of 200 Metric tons per
annum. VLPL has commenced its commercial operations in 2010. VLPL
is into the manufacturing of Active Pharmaceutical Intermediaries.
The company is into manufacturing of API pertaining to therapeutic
segments like Anti Inflammatory, anti hypertension, relaxants,
antihistamines, etc. The company has received Certificate of
Pharmaceutical Products (CoPP) for its products pertaining to
therapeutic segments anti-hypertension and skeletal muscle
relaxants, and is accredited with World Health Organization Good
Manufacturing Practices (WHO GMP) for those products. The company
has also filled Drug Master File (DMF) for its product
Carisoprodol (relaxant) in Brazil.
VLPL registered a PAT of INR0.17 crore out of the total income of
INR17.70 crore in FY12. In FY13 (UA), VLPL registered a PAT of
INR0.89 crore out of the total income of INR36.36 crore.
VISHVANATH GINNING: CARE Rates INR6cr LT Bank Loans at 'B'
----------------------------------------------------------
CARE assigns 'CARE B' rating to the bank facilities of Vishvanath
Ginning & Pressing Factory.
Amount
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 6 CARE B Assigned
The rating assigned by CARE is based on the capital deployed by
the proprietor and the financial strength of the firm at present.
The rating may undergo change in case of the withdrawal of capital
or the unsecured loans brought in by the proprietor in addition to
the financial performance and other relevant factors.
Rating Rationale
The rating assigned to the bank facilities of Vishvanath Ginning &
Pressing Factory (VGPF) is constrained by the financial risk
profile marked by the fluctuating income, thin profitability
margins and stressed debt coverage indicators, working capital
intensive nature of its operations in the competitive and
fragmented cotton ginning industry, fluctuation in prices and
seasonality associated with cotton availability. The rating is
further constrained on account of the constitution of the entity
as a proprietorship firm and impact of the government policies
related to cotton.
The rating, however, derives strength from the long and establish
track record of the firm with the experience of the proprietor in
the cotton ginning business along with the location advantage for
the procurement of raw material.
The ability of the firm to increase its scale of operations while
moving up in the cotton value chain and improvement in the
financial risk profile while managing the price volatility of the
raw material remain the key rating sensitivities.
Jalgaon-based (Maharashtra), Vishvanath Ginning & Pressing Factory
(VGPF), was initially set up by Mr Narayan Hiralal Agrawal in the
year 1944 as a proprietorship firm. Currently, the firm is been
managed by his grandson, Mr Vishvanath Agrawal, as a proprietor.
The firm was set up to undertake the business of cotton ginning
and cotton seeds extraction. VGPF operates from its sole
manufacturing plant at Chopda (Jalgaon) with an installed capacity
of 200 bales per day for cotton bales as on March 31, 2013.
Furthermore, the firm extracts around 600 quintals of cotton seeds
per day in the ginning and pressing process as a by-product. The
firm procures cotton directly from the farmers based out in the
Jalgaon region. The firm supplies cotton bales to many companies
located in and around the vicinity of Maharashtra like Louis
Dreyfus Commodities India Pvt Ltd, Ruchi Worldwide Limited and
Badresh Trading Corporation among others.
During FY13 (provisional) (refers to the period April 1 to
March 31), VGPF earned a PAT of INR0.13 crore on a total income of
INR23.08 crore as against a PAT of INR0.12 crore on a total income
of INR17.79 crore for FY12.
=========
J A P A N
=========
* JAPAN: Corporate Bankruptcies Drop 15.3% in August
----------------------------------------------------
Kyodo News reports that the number of corporate bankruptcies in
Japan fell 15.3 percent from a year earlier to 819 in August for
the 10th consecutive month of decline, a credit research agency
said September 9.
According to the news agency, Tokyo Shoko Research said it was the
lowest level for August since 1990 when Japan was in the midst of
the asset-inflated bubble economy. Liabilities left by bankrupt
firms with at least JPY10 million in debts also fell 23.3 percent
to JPY166.26 billion in the same month, Kyodo News relays.
Behind the decreasing business failures is the Financial Services
Agency's encouragement of loans for small businesses after
legislation for debt repayment moratoriums for such businesses
expired in March, the report notes.
Kyodo News discloses that the number of corporate bankruptcies
declined in all nine regions in Japan for the first time in three
years, with the Hokuriku region in central Japan in the Sea of
Japan side logging the largest drop of 40 percent, followed by the
Tohoku region in northeastern Japan with a fall of 38.2 percent.
====================
N E W Z E A L A N D
====================
STARPLUS HOMES: Winding Up Process Still a Long Way to Go
---------------------------------------------------------
Andrea Fox at stuff.co.nz reports that the receivership of
Starplus Homes is at an end but the winding up of the business has
a long way to go with a court case over proceeds from sales still
in the pipeline.
The Rototuna-based firm ceased trading in early April and went
into voluntary liquidation on April 22, the report notes.
At the time, stuff.co.nz recalls, it was on the way to becoming
Waikato's biggest house building concern. On April 24 Westpac Bank
appointed receivers Andrew McKay and John Cregten of Auckland.
At the time, Starplus Homes owed a total of NZ$34.9 million to
creditors. Secured creditors, which included Westpac and finance
companies, were owed more than NZ$16 million, while unsecured
creditors were owed NZ$18.6 million.
In their final report, stuff.co.nz relays, the receivers said
Westpac had received NZ$320,626 from the sale of one finished
property and had also received a payment from the sale of a second
property by Starplus' agents, which was not included in the
report.
But Westpac was still owed money, the report, as cited by
stuff.co.nz, said.
Meanwhile, stuff.co.nz reports that joint liquidator Shaun Adams,
head of insolvency and restructuring at KPMG, said he was working
hard to recover cash from the liquidation, which would continue
into next year when arguments between liquidators and suppliers
over the proceeds of Starplus' asset sales will be tested in court
in Auckland.
The parties to the court action include Waikato contractors,
tradespeople and retailers. According to the report, Mr. Adams
said unsecured creditors could receive cash in the range of
1 cent and 20c in the dollar, although that was a "very, very
preliminary" figure and the 20c end was probably on the high side.
The liquidation, as expected, was proving long and complex and was
still in the early stages, he said, stuff.co.nz reports.
About Starplus Homes
Starplus Homes Ltd is a Hamilton-based home building company.
The company was put into voluntary liquidation on April 22 -- two
days ahead of a major creditor applying to the High Court to have
the business wound up. John Buchanan, of Northside Insolvency in
Auckland, was named as liquidator.
Westpac Bank also appointed Corporate Finance's Andrew McKay and
John Cregten as receivers, further confusing the situation around
a property company failure thought to be the biggest in the
Waikato since the start of the global financial crisis in 2008,
according to Waikato Times.
On May 2, the High Court approved KPMG insolvency practitioner
Shaun Adams' application to be appointed joint and several
liquidator alongside Mr. Buchanan, stuff.co.nz said. On May 6,
creditors voted almost unanimously to approve the appointment of
both men.
=====================
P H I L I P P I N E S
=====================
* PHILIPPINES: PDIC Seeks More Modes of Liquidation
---------------------------------------------------
Genivi Factao at BusinessMirror reports the Philippine Deposit
Insurance Corp. (PDIC) seeks further refinements to the framework
that allows the regulator to look into the deposit accounts of
problematic banks without breaking the law on the secrecy of
deposits.
BusinessMirror relates that the PDIC is often stymied in previous
efforts to rescue problematic banks because the deposit secrecy
provisions are very stringent, effectively tying the hands of
regulators and help foster disruptive instead of smooth bank
closures.
According to the report, PDIC President Valentin Araneta said
alternative methods of rescue need to be found and for this reason
proposed the adoption of the Bank Resolution and Liquidation Act
to make this happen.
The proposal seeks the enabling of a comprehensive law that will
provide alternative methods for the rehabilitation of banks and
the orderly liquidation of closed banks in the Philippines, the
report relays.
Mr. Araneta said the PDIC is pushing for legislative reforms
covering banks liquidation as alternative modes to bank failure
resolution to prevent closure if this was practical,
BusinessMirror reports.
"We need more tools and legal basis to address problems in banks
that will allow PDIC and Bangko Sentral ng Pilipinas [BSP], which
has its own version for their own charter -- to smoothen the
resolution of banks to prevent failure and prevent disruption in
the system," the report quotes Mr. Araneta as saying.
Mr. Araneta said the bank secrecy law as written now, does not
encourage the smooth resolution of banks in distress, the report
relates.
Mr. Araneta pointed out the proposed amendments were for purposes
of better regulation rather than for taxation and other purposes
as some in the industry have feared. "We need to address the bank
secrecy issue. It's going to be difficult to have a resolution,"
Mr. Araneta, as cited by BusinessMirror, said.
====================
S O U T H K O R E A
====================
STX GROUP: Chairman Steps Down as Head of Shipbuilding Unit
-----------------------------------------------------------
Kim Rahn at The Korea Times reports that STX Group Chairman Kang
Duk-soo stepped down from the chief position at the group's cash-
strapped shipbuilding arm, STX Offshore & Shipbuilding, Monday.
His resignation came along with a decision by shipbuilder's board
of directors' to tap a new chief for the company, the report
relates.
According to The Korea Times, main creditor Korea Development Bank
(KDB) said the board members unanimously passed the bill for a new
head during a board meeting.
The report relates that the move came four days after the
creditors decided to recommend Park Dong-hyuk, vice president of
rival Daewoo Shipbuilding and Marine Engineering, as the new chief
of the firm.
"Kang said he could not but accept the creditors' decision as he
had to take responsibility for his mismanagement," the report
quotes KDB official as saying. "Although some directors wanted
the creditors to give Kang another chance, Kang himself said his
priority was to revive the company and that he would follow the
creditors' decision."
While Park will replace Kang, the board also decided to appoint
the firm's Vice President Ryu Jeong-hyeong as president, with the
current President Shin Sang-ho also resigning, the report relays.
The replacements will be finalized through a vote at a
shareholders' meeting slated for Sept. 27, the Korea Times adds.
STX Offshore and two other units of the STX Group had voluntarily
sought debt rescheduling with their creditors, Bloomberg News
reported.
STX Pan Ocean sought court receivership after Korea Development
Bank, the main creditor and Pan Ocean's second-biggest
shareholder, decided against buying the company from STX Group,
Bloomberg News reported.
STX Group -- with businesses ranging from shipbuilding to
components that go into vessels -- is the largest shareholder of
Seoul-based Pan Ocean. The parent has been trying to raise
KRW2.5 trillion (US$2.2 billion) by selling stakes in units as a
slump in bulk shipping rates caused ship orders to tumble,
Bloomberg said.
================
S R I L A N K A
================
CEYLEASE LTD: Fitch Upgrades National LT Rating From 'BB+'
----------------------------------------------------------
Fitch Ratings Lanka has upgraded Sri Lanka-based Ceylease Ltd's
(CL) National Long-Term Rating to 'BBB(lka)' from 'BB+(lka)',
removed it from Rating Watch Positive and withdrawn the rating as
the company no longer exists.
This follows the announcement of the merger between MCSL Financial
Services Limited's (MFSL) and CL, both subsidiaries of Bank of
Ceylon (BOC; 'AA+(lka)'/Stable) on 22 August 2013
The agency has also affirmed the National Long-Term Rating of the
surviving entity, MFSL, at 'BBB(lka)' with a Stable Outlook, which
is based solely on strong expectations of support from parent BOC,
in case of need.
Key Rating Drivers
CL's upgrade prior to withdrawal was to equalise the rating with
MFSL's National Long-Term Rating. This is because after the
merger, CL's creditors are now exposed to the same credit risk as
MFSL's creditors.
MFSL's rating is based on strong expectations of support to MFSL
from BOC, which continues to have a dominant effective
shareholding of 80% post-merger. The core business of the merged
entity is likely to remain vehicle finance, in the form of finance
lease and hire purchase.
Fitch considers the standalone credit profile of the merged entity
to be weak, driven by deteriorating asset quality, a thin loss-
absorption capacity, and declining profitability. Non-performing
loans net of reserves amounted to 270% of equity in H113,
undermining the company's solvency. Return on average assets fell
to 0.1% in H113 from 2% in 2012 due to a declining net interest
margin.
Fitch expects capitalisation of the merged entity to remain thin,
with MFSL's pre-merger ratios of equity/assets and Fitch core
capital/risk-weighted assets falling to 8.6% and 10.2% in H113
from 9.5% and 10.9% in 2012. CL's equity/assets ratio increased
marginally to 14.1% at end-H113 (2012: 13.9%) due to a contraction
of its loan book, but CL comprises only 24% of the merged entity's
equity.
Liquidity of the merged entity is also quite thin. As a finance
company, MFSL's funding is predominantly from term deposits,
which, although improving, remain concentrated and have a modest
retention rate. Maturity mismatches under a 12-month period remain
high - as is the case across domestic peers - with unutilised
credit lines insufficient to bridge the gap. Nevertheless, Fitch
expects adequate liquidity support from BOC would be forthcoming
if required. Notes issued by CL are likely to be converted to
deposits upon maturity if rolled over.
Rating Sensitivities
MFSL's rating is sensitive to changes in the willingness or the
ability of BOC to support the company. This would include any
significant changes in BOC's effective shareholding or board
control.
MFSL's current shareholders are BOC with a 50% stake, Merchant
Bank of Sri Lanka Plc (72.1% subsidiary of BOC) with 41.6% and
minority shareholders holding 8.3%.
===============
X X X X X X X X
===============
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Nov. 1, 2013
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Atlanta Marriott Marquis, Atlanta, Ga.
Contact: 1-703-739-0800; http://www.abiworld.org/
Dec. 2, 2013
BEARD GROUP, INC.
19th Annual Distressed Investing Conference
The Helmsley Park Lane Hotel, New York, N.Y.
Contact: 240-629-3300 or http://bankrupt.com/
Dec. 5-7, 2013
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Terranea Resort, Rancho Palos Verdes, Calif.
Contact: 1-703-739-0800; http://www.abiworld.org/
*********
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.
*********
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 ***