/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/131014.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 Monday, October 14, 2013, Vol. 16, No. 203 Headlines C H I N A CHINA PROPERTIES: Fitch Rates $150MM Unsec. USD Notes at 'B-' PARKSON RETAIL: Moody?s Affirms Ba1 CFR & Sr. Debt Ratings WINSWAY COKING: Fitch Downgrades Issuer Default Rating to 'C' I N D I A AASHIRWAD INDUSTRIES: CARE Assigns 'B+' Rating to INR13.2cr Loans ALANG SHIP: CARE Reaffirms 'BB' Rating on INR3cr LT Ban Loans BERGWEFF ORGANIC: CARE Raises Rating on INR11.44cr Loans to BB+ BHIKKAMAL CHHOTELAL: CARE Reaffirms BB- Rating on INR7.5cr Loans DHANLAXMI SOLVEX: CARE Reaffirms 'BB+' Rating on INR9.8cr Loans EASTERN BEARINGS: CARE Assigns 'BB' Rating to INR11.14cr Loans MENTOR INDIA: CARE Reaffirms 'BB' Rating on INR20cr Bank Loans NARAYAN DEVELOPERS: CARE Assigns 'BB-' Rating to INR10cr Loans PAUL & COMPANY: CARE Reaffirms 'BB+' Rating on INR16.5cr Loans P. PATEL: CARE Reaffirms 'BB' Rating on INR6cr LT Bank Loans SHREE SAI: CARE Rates INR10cr Long-Term Loans at 'B+' SHREE SIDDHI: CARE Assigns 'B' Rating to INR10cr LT Bank Loans SRI JAIBALAJI: CARE Reaffirms 'C' Rating on INR22.59cr Loans SUWARNA BUILDCON: CARE Places 'BB' Rating to INR13cr Bank Loans I N D O N E S I A BUMI RESOURCES: Moody's Lowers Corporate Family Rating to 'Ca' PROFESIONAL TELEKOMUNIKASI: S&P Rates Sr. Unsec. Bank Loan 'BB' - - - - - ========= C H I N A ========= CHINA PROPERTIES: Fitch Rates $150MM Unsec. USD Notes at 'B-' ------------------------------------------------------------- Fitch Ratings has assigned China Properties Group Limited's (CPG) USD150m 13.5% senior unsecured USD notes due 2018 a final rating of 'B-'. The assignment of the final rating follows the receipt of documents conforming to information already received and the final rating is in line with the expected rating assigned on May 26, 2013. Key Rating Drivers Limited sales track record: CPG had less than HKD1bn in annual revenue in the past three years, including HKD693m in 2012. However, given an inventory of over 600,000 sqm in gross floor area (GFA) available for sale in 2013, the company can potentially achieve significant growth in sales if it overcomes technical issues delaying construction and chooses to ramp up pre-sales. Project concentration risk: Over 95% of its sales in 2012 were contributed by one project, Chongqing Manhattan. Although the project still has over 1.2 million sqm of unsold GFA and more projects are likely to contribute to sales in the future, the limited number of projects leads to concentration risk, making cash flow less likely to be stable. High capex needs: While CPG has settled all land premiums for existing projects, given more than 4.5 million sqm for future development, Fitch expects CPG to incur capex of over HKD8bn over the next four years to develop its property portfolio. Its currently low gearing, with estimated 20% of net debt/adjusted inventory after excluding market revaluation from investment properties at end-H113, may be maintained only if the company significantly ramps up pre-sales of its development properties. Prime locations: While its investment properties currently generate limited recurrent income, they were valued at HKD60bn at end-H113 and are located in prime locations in downtown of Shanghai and Chongqing. Fitch expects the unique locations and large scale of the investment properties will provide CPG with financial flexibility. Low land costs: Much of the land bank was acquired over five years ago at low cost, especially for its projects in Shanghai. This should allow CPG to achieve higher gross and EBITDA margins of over 50% in its future sales. It will also provide CPG with price flexibility in a market downturn. Strong shareholder's support: The company's managing director and 75% shareholder, Wong Sai Chung, has provided significant financial support by subscribing to HKD500m of convertible notes, and providing over HKD1.3bn of a shareholders' loan, which is subordinated to CPG's other debt, including the proposed senior unsecured bonds. Funding from the shareholder has helped underpin the company's financial position. Rating Sensitivities Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- A deterioration in CPG's liquidity position, for example, failure to refinance maturing debt -- Repayment of the shareholders' loan without any improvement in the company's operating cash flows Positive: Future developments that may, individually or collectively, lead to positive rating action include: -- Attainment of contracted sales of over HKD5bn and recognized revenue of over HKD3bn while maintaining its current strong financial position -- Reduced concentration risk such that no single project accounts for over 70% of total sales PARKSON RETAIL: Moody?s Affirms Ba1 CFR & Sr. Debt Ratings ----------------------------------------------------------- Moody's Investors Service has changed Parkson Retail Group Limited's Ba1 rating outlook to negative from stable. At the same time, Moody's has affirmed Parkson's Ba1 corporate family and senior unsecured debt ratings. Ratings Rationale: "The change in outlook reflects Moody's conclusion that Parkson's weak performance will continue for some time due to China's economic slowdown and intensified competition in the retail sector," says Alan Gao, a Moody's Vice President and Senior Analyst. Parkson's 1H 2013 operating profit dropped by 32% year-on-year to RMB441 million, while its overall merchandise gross margin declined to 17.4% from 18.1% in 2012, continuing the downtrend evident since 2010 when it was 19.0%. The decline in profitability was driven by lower concessionaire rates and increased operating costs, mostly from lease renewals and new store openings. Parkson owns less than 20% of its stores, a situation which exposes it to rent increases and relocation risks. Its rent/gross sales proceeds ratio increased to 5.9% in 1H 2013 from 5.3% in 2012 and 4.1% in 2011. The ability to anchor in the right location is key to success in lower tier cities, and without self-owned stores, Parkson's growth in such cities will be challenging. A recovery in Parkson's profitability is uncertain in the near term because most of its revenue comes from its mature stores in major cities, where competition is rising. There is also competition from internet retailing. Moreover, its new stores are experiencing slow rises in sales and high incubation costs. "Parkson's weakened level of profitability and high capital requirements for expansion into lower tier cities have translated into weaker credit metrics." says Gao. Parkson expands at the rate of 4-6 stores per year and plans to increase ownership in stores may drive up its level of leverage. Moody's expects its adjusted debt/EBITDA ratio to rise over 4.5x in the next 12-18 months, which is weak for its Ba1 ratings. On the other hand, Parkson's liquidity will remain strong in the next 12 months. The company had total cash on hand equivalent to RMB4.4 billion as of June 30 2013, and which can cover capital expenditures of around RMB2 billion per year. Near-term rating upgrade pressure will be limited, given the negative outlook. However, the outlook could change back to stable if Parkson maintains strong liquidity and can stabilize the performance of its mature stores and achieve sales ramp-ups at its new stores. In such a situation, Parkson's EBIT's margins will be above 30%-35% and debt/EBITDA below 3.5x-4x. The rating could experience downward rating pressure if Parkson (i) is unable to recover profitability due to rising competition, and/or an erosion in its bargaining power over its concessionaires/suppliers; or (ii) increases acquisitions, resulting in a decline in liquidity, or an increase in debt leverage. Credit metrics which indicate downgrade pressure would include adjusted debt/EBITDA above 4.5x-5.0x and retained cash flow (RCF)/adjusted net debt below 12%-14% on a sustained basis. Furthermore, any sign that the company is extending financial support to its parent, the Lion Group, would also pressure the ratings. Parkson Retail Group Limited, listed on the Hong Kong Stock Exchange, is one of the largest operators of department-store chains in China. As of 30 June 2013, it had 54 self-owned stores and one managed store in 35 cities. It targets the middle- and middle-upper-end of the Chinese retail market. It is 51.5% owned by Parkson Holdings Berhad (PHB), an affiliate of Malaysia's Lion Group. WINSWAY COKING: Fitch Downgrades Issuer Default Rating to 'C' ------------------------------------------------------------- (Matet) Fitch Downgrades China's Winsway to 'C' Ratings Endorsement Fitch Ratings-Hong Kong/Singapore-10 October 2013: Fitch Ratings has downgraded China-based Winsway Coking Coal Holdings Limited's (Winsway) Issuer Default Rating and senior unsecured ratings to 'C' from 'CCC'. No Outlook has been assigned. This follows the company's announcement on 9 October 2013 that it had received consents from 68.6% of the holders of its outstanding USD notes due 2016 to eliminate a substantial number of the restrictive covenants and certain events of defaults contained in the current indenture. In addition, 33.35% of the holders also tendered their notes in return for payments far below par. Key Rating Drivers DDE after Noteholders Tendered: Fitch treats this exchange as a Distressed Debt Exchange (DDE), as all noteholders are stripped of meaningful covenants, including the requirement to apply asset disposal proceeds to repay the notes. In addition 33.35% of the noteholders are taking an immediate loss on par value by tendering in their notes. Buyback Background: Existing noteholders were asked to voluntarily tender their notes, receiving either an immediate cash payment of 47.5% of par, or an immediate cash payment of 37.5% of par and cash payment of 25% of par when the notes mature in April 2016. The company also provided an option for noteholders to waive the notes covenants without tendering their notes for a 2.5% consent payment. Cash Generation Further Deteriorates: Fitch does not expect Winsway's core business to generate positive free cash flow (H113: a reported gross outflow of HKD337m). Fitch believes the prospects for improvement are low, barring a sharp and sustained increase in coking coal prices. This weakens the prospect of increasing cash resources for the notes' repayment in 2016. Debt Maturity Looms: Following this exercise, Winsway still faces a repayment of USD306.9m (HKD2.38bn) of outstanding notes maturing in 2016. On 30 June 2013, the company reported an unrestricted cash balance of HKD1.79bn, and restricted bank deposits of HKD963m that had been pledged for its bank borrowings. Fitch estimates that a total of USD76m (HKD591m) will be paid out for the notes buyback and consent solicitation fees, lower than the originally expected USD82m (HKD636m) Refinancing Ability Reduces: Fitch believes that the company will have to rely on refinancing for a significant portion of the scheduled maturity in 2016. However, its success in securing covenant waivers now may worsen the prospects for refinancing. RATING SENSITIVITIES Negative: Future developments that may, individually or collectively, lead to negative rating actions include: -- Upon settlement of the payments to noteholders who tendered and the execution of the amendment to the indenture, now expected on 11 October 2013, the IDR will be downgraded to 'restricted default' (RD). Following that, Fitch will rate the company and its notes based on the new capital structure, ranking of the notes within the group, its changed liquidity profile, and solvency prospects. ========= I N D I A ========= AASHIRWAD INDUSTRIES: CARE Assigns 'B+' Rating to INR13.2cr Loans ----------------------------------------------------------------- CARE assigns 'CARE B+' rating to the bank facilities of Aashirwad Industries Private Limited. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank 13.20 CARE B+ Assigned Facilities Rating Rationale The rating assigned to the bank facilities of Aashirwad Industries Private Limited is constrained due to its short track record of operations, presence in a sector dominated by established large players, threat of restrictions on usage of asbestos and vulnerability of margins to fluctuations in raw material prices. The rating, however, is underpinned by the long industry experience of the promoters, moderate financial risk profile of the company, reasonable operating income in the first year of its operations and rising demand for asbestos cement sheets from the rural markets. The ability of the company to scale up its operations, attain stabilization of operations and working capital management coupled with managing raw material fluctuation risk and foreign exchange would be key rating sensitivities. Aashirwad Industries Private Limited is a Nagpur-based company incorporated in June 2012. Promoted by Mr Shivkumar Agarwal and Mr Sanjay Agarwal, the company is engaged in the manufacturing of Asbestos Cement (AC) roofing sheets and accessories. Located in Butibori Industrial area of Nagpur, the facility has an installed capacity of 54,000 metric tonnes per annum (MTPA). AC corrugated sheets manufactured by AIPL are extensively used for the roofing of factory buildings, warehouse, godowns, railway platforms garage, low cost housings in the rural areas and others. Branded as "AASHIRWAD", the company sells the product through its stockists in the states of Maharashtra, Madhya Pradesh, Orissa, Jharkhand, Gujarat and Andhra Pradesh. AIPL was established to take-over the ongoing operations of the Nagpur unit of UP Asbestos Ltd (UPAL). The Nagpur unit of the UPAL commenced operations in the year 2000 and was taken-up as a going- concern by AIPL in November 2012. During FY13 (refers to the period April 01 to March 31), AIPL earned a PBILDT of INR0.66 crore on a total operating income of INR7.15 crore. ALANG SHIP: CARE Reaffirms 'BB' Rating on INR3cr LT Ban Loans ------------------------------------------------------------- CARE reaffirms the ratings assigned to the bank facilities of Alang Ship Breaking Corporation. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank 3.00 CARE BB Reaffirmed Facilities Short-term Bank 26.00 CARE A4+ Reaffirmed Facilities 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 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 ratings assigned to the bank facilities of Alang Ship Breaking Corporation (ASBC) continue to be constrained by its constitution as a partnership firm with modest scale of operations, thin profitability which is susceptible to volatile steel prices and foreign exchange rates; and its modest debt coverage indicators. The ratings are further constrained on account of its exposure to high regulatory and environmental hazard risk in an intensely competitive and cyclical ship-breaking industry. The ratings, however, draw strength from ASBC's experienced partners and its favourable location. The ability of ASBC to manage the inherent price volatility risk on the uncut inventory of ships and foreign exchange fluctuation risk along with the timely renewal of validity of the leased plot of land for ship-breaking are the key rating sensitivities. ASBC is a partnership firm engaged in ship-breaking activity in the Alang?Sosiya belt of Bhavnagar region in Gujarat. Its group concern P. Patel Ship Breaking Co. (PPSBC; rated CARE BB/CARE A4+), a partnership firm, is also engaged in ship breaking activity in the same region. The partners of both the firms are family members and have experience of more than two decades in the ship breaking industry. Both the firms together have dismantled more than 60 ships till June 30, 2013. Based on audited financials, ASBC reported a PAT of INR0.48 crore on a total operating income of INR60.87 crore during FY13 (refers to the period April 1 to March 31) as against a PAT of INR0.42 crore on a total operating income of INR54.06 crore during FY12. BERGWEFF ORGANIC: CARE Raises Rating on INR11.44cr Loans to BB+ --------------------------------------------------------------- CARE revises the rating assigned to the bank facilities of Bergweff Organic India Private Limited. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank 11.44 CARE BB+ Revised from Facilities CARE BB- Rating Rationale The revision in the long-term rating of Bergweff Organic India Private Limited is on account of the improvement in the financial risk profile characterised by growth in the scale of operations and improvement in the capital structure coupled with debt coverage indicators. The rating of BOIPL continues to be constrained by the susceptibility of its operating margins to fluctuation in the price of agro-based raw materials, foreign exchange fluctuation risk and presence in the highly competitive and fragmented food processing industry. The rating continues to derive strengths from the experience of the promoters of BOIPL and positive demand outlook for organic food products. BOIPL's ability to scale up the operations along with maintaining the profitability margins and efficient management of working capital cycle are the key rating sensitivities. Incorporated in March 2005 and commenced operations in 2009, Bergwerff Organic India Private Limited is an export oriented unit, engaged in the processing, fumigation and sterilization of organic food products (mainly spices like chilli, ginger and turmeric). BOIPL is in the process of setting up its own warehouse near the processing facility with a view to reduce the process loss/wastage and reduce transportation cost at a total cost outlay of INR3.20 crore [funded through term loan of INR2.40 crore (yet to be sanctioned) and balance through internal accruals]. However, the company has already undertaken repairs and civil works and incurred cost of INR1.30 crore which was entirely funded through internal accruals. BOIPL is a subsidiary of Suminter India Organics Pvt Ltd (SIOPL) which is engaged in organic farming and distribution activities since 2004. Before the incorporation of BOIPL, SIOPL was outsourcing the processing of the cultivated seeds, crops and spices. BOIPL procures the majority of raw material required for processing from SIOPL. Furthermore, BOIPL and SIOPL have given cross guarantee to the bank facilities of each other. SIOPL has sanctioned bank debt of INR45 crore mainly in the form of working capital borrowings. The consolidated overall gearing as on March 31, 2013 stood at 0.73 (vis-.-vis 0.60 as on March 31, 2012). During FY13 (refers to the period April 01 to March 31), BOIPL posted total operating income of INR56.88 crore (up by 40.44% vis- a-vis FY12) and PAT of INR2.99 crore (vis-a-vis INR 0.96 crore in FY12). The company has posted sales of INR40 crore till August 31, 2013, and has an order book position of INR26.96 crore which is likely to be executed by October 2013. BHIKKAMAL CHHOTELAL: CARE Reaffirms BB- Rating on INR7.5cr Loans ---------------------------------------------------------------- CARE reaffirms the ratings assigned to the bank facilities of Bhikkamal Chhotelal Exim Pvt. Ltd. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank 7.50 CARE BB- Reaffirmed Facilities Short-term Bank 61.35 CARE A4 Reaffirmed Facilities Rating Rationale The ratings of Bhikkamal Chhotelal Exim Pvt. Ltd. (BCEPL) continue to be constrained by its high leverage, thin profitability which is susceptible to volatile steel prices and foreign exchange rate fluctuation and its presence in the cyclical ship-breaking industry which is characterized by high regulatory and environmental hazard risk. The ratings, however, draw strength from BCEPL's experienced promoters, its favorable location and increase in scale of operations. The ability of BCEPL to manage the inherent price volatility risk on the uncut inventory of ships and foreign exchange fluctuation risk along with the timely renewal of validity of the leased plot of land for ship-breaking and improvement in its capital structure are the key rating sensitivities. BCEPL was established as a partnership firm in 1950 and subsequently got incorporated in 1983. It is engaged in the ship- breaking business in the Alang-Sosiya belt of Bhavnagar region in Gujarat. The company has leased plot No.16, admeasuring 3,600 square meters, from Gujarat Maritime Board (GMB) for a period of one year and on completion of the tenure of agreement, it is generally renewed. BCEPL has dismantled over 100 vessels of various types with capacities ranging around 4,000 light deadweight tonnage (LDT) to very large crude carriers (VLCC) of around 40,000 LDT till June 30, 2013. Based on audited financials, BCEPL reported a PAT of INR0.97 crore on a total operating income of INR121.72 crore during FY13 (refers to the period April 1 to March 31) as against a PAT of INR1.05 crore on a total operating income of INR33.23 crore in FY12. DHANLAXMI SOLVEX: CARE Reaffirms 'BB+' Rating on INR9.8cr Loans --------------------------------------------------------------- CARE reaffirms the ratings assigned to the bank facilities of Dhanlaxmi Solvex Pvt Ltd. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank 9.80 'CARE BB+' Reaffirmed Facilities Long-term/Short-term 173.00 'CARE BB+/CARE A4+' Bank Facilities Reaffirmed Short-term Bank 133.52 'CARE A4+' Reaffirmed Facilities Rating Rationale The ratings of Dhanlaxmi Solvex Private Ltd continue to remain constrained on account of its tight liquidity on the back of high working capital intensity of its operations, susceptibility of its thin profitability to volatile commodity prices, modest debt coverage indicators and its presence in the highly fragmented agro-commodity business. The ratings, however, continue to take into account the vast experience of the promoters in soya business, DSPL's established operations, proximity to soyabean growing region, favourable demand-supply scenario in edible oil segment in India and good demand prospect for soya meal. The ratings also take into account the improvement in its capital structure due to conversion of unsecured loans. DSPL's ability to effectively manage its working capital along with improvement in profitability through better capacity utilisation of its manufacturing facilities and the ability to withstand fluctuations in raw material prices are the key rating sensitivities. Incorporated in January 2006, DSPL is promoted by Manglani Group based out of Indore. DSPL is an established integrated agro-food processor primarily engaged in crushing and processing of soyabean for extraction of soyaoil and soyameal (De-Oiled Cake; DOC). DSPL has its manufacturing facilities situated at Shajapur, Kareli, Dewas and Harda having combined (including solvent extraction and refining) installed capacity of 3,000 Tonnes per day (TPD) as on March 31, 2013. During FY13 (refers to the period April 1 to March 31), DSPL reported a total operating income of INR878.50 crore (FY12: INR677.67 crore) and PAT of INR12.03 crore (FY12: INR2.33 crore). Further, during Q1FY14, as per provisional results, DSPL has reported a total operating income of INR116.46 crore and PBT of INR1.48 crore. EASTERN BEARINGS: CARE Assigns 'BB' Rating to INR11.14cr Loans -------------------------------------------------------------- CARE assigns 'CARE BB' and 'CARE A4+' ratings to the bank facilities of Eastern Bearings Private Limited. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank 11.14 CARE BB Assigned Facilities Short-term Bank 8.00 CARE A4+ Assigned Facilities Long-term/ Short-term 0.50 CARE BB/CARE A4+ Bank Facilities Assigned Rating Rationale The ratings assigned to the bank facilities of Eastern Bearings Private Limited are primarily constrained by working capital intensive nature of operations, leveraged capital structure, declining profitability margins and exposure to raw material price volatility. The ratings, however, draw comfort from experienced promoters, association with 'ARB' brand and growing scale of operations with wide geographic presence. The ratings further draw comfort from positive growth prospects for the solar energy sector. Going forward, the ability of EBP to increase the total operating income while improving the profitability margins and efficiently manage working capital requirements coupled with improvement in the capital structure and coverage indicators shall be the key rating sensitivities. Eastern Bearings Private Limited was incorporated in March, 2000 as a private limited company and is currently being managed by Mr. Sunil Goel, Mr. Surinder Goel, Mr. Sunil Goyal and Mr. Saurabh Bansal. EBP is engaged in manufacturing of heavy industrial bearings and solar panels at its manufacturing facility located in Sonipat, Haryana. EBP offers its bearings range of products under the brand name "ARB" in both domestic and overseas market. The company offers its solar products to system integrators in domestic market. For FY12 (refers to the period April 1 to March 31), EBP achieved a total operating income of INR38.82 crore with PBT of INR0.68 crore. In FY13 (based on unaudited results), the company achieved a total operating income of INR60.56 crore with PBT of INR1.60 crore. MENTOR INDIA: CARE Reaffirms 'BB' Rating on INR20cr Bank Loans -------------------------------------------------------------- CARE reaffirms the rating assigned to the bank facilities of Mentor India Ltd. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank 20 CARE BB Reaffirmed Facilities Rating Rationale The rating continues to be constrained by the relatively small scale of operations of Mentor India Ltd (MIL), its moderate asset quality, low geographical diversification of its loan portfolio and nascent risk management system. The rating, however, continues to factor in the experience of the promoters in various businesses and understanding of the local market. The rating is also underpinned by the secured and diversified nature of its loan portfolio along with its comfortable capital adequacy. Increase in the scale of operations with greater geographical diversification along with the improvement in asset quality, maintaining comfortable capital adequacy and risk management systems are the key rating sensitivities. MIL was promoted by Mr. Basant Kumar Goyal and his brother, Mr. Pawan Kumar Goyal, in 1995 and is registered as a non-deposit taking Non-Banking Finance Company (NBFC) with the Reserve Bank of India (RBI). The company is headquartered in Jaipur and is engaged in vehicle financing (two-wheelers and commercial vehicles) and mortgage lending (mainly residential properties) in Rajasthan. MIL operates out of its network of 13 branches located in 6 districts of Rajasthan. MIL generates two-wheeler business through a network of 20 dealers. MIL reported a total income of INR7.27 crore with a PAT of INR1.02crore in FY13 (refers to the period April 1 to March 31) as against a total income of INR5.06 crore with a PAT of INR0.58crore in FY12. Furthermore, as per the provisional results for Q1FY14, MIL reported a total income of INR2.07 crore. NARAYAN DEVELOPERS: CARE Assigns 'BB-' Rating to INR10cr Loans -------------------------------------------------------------- CARE assigns 'CARE BB-' rating to the bank facilities of Narayan Developers. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank 10 CARE BB- Assigned Facilities 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 Narayan Developers is constrained on account of the project implementation and saleability risk coupled with modest level of booking advance received from the customers. The rating is also constrained on account of the inherent risk associated with the real estate sector in India which is marked by high fragmentation and city/region specific developments. The rating, however, derives strength from the vast experience of the key partners in the construction industry and moderate gearing level of the project being executed. The successful completion of the on-going real estate project and timely receipt of booking advance from customers and sale of further units at envisaged prices would be the key rating sensitivity for Narayan. Ahmedabad-based (Gujarat), Narayan was established in January 2010 to execute a residential cum commercial project in Ahmedabad in the name of "Shayona Green". Mr Amrut Patel and Mr Vishnu Patel are the key partners having 20% and 12.50% stake in the firm, respectively. Narayan Developers is a part of the Shayona Group under which these key partners have executed various residential and commercial projects in Ahmedabad. The 'Shayona Green' project, ie, the on-going project of Narayan is being executed at the Gota area of Ahmedabad city. Under Shayona Green, Narayan is offering 245 residential units (13 blocks) of low rise residential flats having 2BHK and 3BHK and a separate block consisting of 45 commercial units. PAUL & COMPANY: CARE Reaffirms 'BB+' Rating on INR16.5cr Loans ------------------------------------------------------------- CARE reaffirms the ratings assigned to the bank facilities of Paul & Company Steel Merchants Pvt Limited. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank 16.5 CARE BB+ Reaffirmed Facilities Short-term Bank 13.0 CARE A4+ Reaffirmed Facilities Rating Rationale The ratings of Paul & Company Steel Merchants Pvt Ltd (PCSM) are constrained by its low profit level and margin, low networth base and geographical and supplier concentration risk. The ratings also factor in the benefits derived from the experience of the promoters, sole distributorship of TATA Steel Ltd in Howrah & Hooghly district (both in West Bengal) and large dealership base. Improving scale of operation and margin, demand prospects for the steel industry and regular renewal of agreement with TSL are the key rating sensitivities. PCSM was incorporated in February 2009, by Paul family of Kolkata, West Bengal. Prior to setting up PCSM, Mr Sunil Krishna Paul, Managing Director, was engaged in trading of cement and was a dealer of 'Tata Tiscon' re-bars through a proprietorship firm (M/S Paul & Co, established in 1985). The business activities of the erstwhile proprietorship business were transferred to PCSM from February 26, 2009. PCSM is Tata Steel Limited's (TSL ? rated CARE AA+/A4+) sole authorized distributor of its product, Tata Tiscon re-bars, in Howrah & Hooghly districts of West Bengal since 1985. Sale from distributorship business constituted 93.4% of the company`s aggregate revenue in FY13. PCSM is also the stockiest for leading cement companies, sale from which constituted 6.6% of the company`s aggregate revenue in FY13. Credit Risk Assessment Experienced promoters The promoters of PCSM have been present in this same line of business for more than two decades and have gained adequate experience. Currently, PCSM is managed by a three member Board with Mr. Sunil Krishna Paul (having an experience of about 25 years) being at the helm of affairs of the company. Authorised distributorship of TSL leading to competitive advantage PCSM, sole authorised distributor of TSL (rated CARE AA+) product, Tata Tiscon Re-bars in Howrah & Hooghly districts (both in West Bengal), is associated with the latter since 1985. The company has established a strong network of 130 dealers in its area and has successfully scaled up its business achieving net turnover of INR142.4 crore, registering a growth of 34% in FY13. While cheaper branded and unbranded products provide some competition, PCSM is able to command a monopoly position in TSL's products in its area of operation on account of being the sole authorised distributor. Renewal-based dealership The dealership agreement between PCSM and TSL is a single year contract and has to be renewed every year. Furthermore, there is risk of appointment of another distributor by TSL in the region. However, comfort can be drawn from the fact that TSL has renewed the contract continuously for the last 27 years. Large dealership base The company, being sole distributor of TSL products in Howrah & Hooghly districts of West Bengal, has entered into tie ups with large no of dealers. As on March 31, 2013, the company had 125 dealers for TATA Tiscon re-bars in this region expanded from 110 in FY12. Financial profile marked by low profitability and moderate gearing ratios Financial performance of PCSM over the last three years is characterized by growing revenue at a CAGR of 24.7% from FY11 to FY13 respectively. The growth in the business is at the back of higher demand of steel re-bars. Though net sales have been improving over the years, the operating profit margin has generally been low, as the pricing of the products are determined and controlled by TSL. Furthermore, the company also has to abide by all other discounts, rebates and incentive schemes offered by TSL while dealing with its dealers. The overall gearing of the business has been high at 1.62x as on March 31, 2013, due to the working capital intensive nature of business coupled with small net worth base. However, the total debt to GCA position improved during the year due to improvement in PAT levels. Geographical concentration risk The operations of PCSM are confined to Howrah & Hooghly districts both in West Bengal being authorized dealer of TSL for such region which exposes the company to high geographical concentration risk. Dependent on the growth of the economy The performance of the steel sector is linked to the fortune of infrastructure sector, which, in turn, are dependent on the macroeconomic condition, thereby making steel trading activity highly dependent on the growth of the economy. The short term outlook for the domestic steel industry remains volatile and uncertain. Nevertheless, these concerns are expected to fade away in the medium term. The company is dealing with highly recognized TSL product and is entitled to receive stated margin on the goods sold, its margins are more or less insulated. Ability of the company to continue to renew contract with TSL, successfully scale up operation and effectively manage its working capital management shall be crucial for the company and be the key rating sensitivities. P. PATEL: CARE Reaffirms 'BB' Rating on INR6cr LT Bank Loans ------------------------------------------------------------ CARE reaffirms the ratings assigned to the bank facilities of P. Patel Ship Breaking Company. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank 6.00 CARE BB Reaffirmed Facilities Short-term Bank 58.00 CARE A4+ Reaffirmed Facilities 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 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 ratings assigned to the bank facilities of P. Patel Ship Breaking Company (PPSBC) continue to be constrained by its constitution as a partnership firm with modest scale of operations, thin profitability which is susceptible to volatile steel prices and foreign exchange rates; and its modest debt coverage indicators. The ratings are further constrained on account of its exposure to high regulatory and environmental hazard risk in an intensely competitive and cyclical ship-breaking industry. The ratings, however, draw strength from PPSBC's experienced partners and its favorable location. The ability of PPSBC to manage the inherent price volatility risk on the uncut inventory of ships and foreign exchange fluctuation risk along with the timely renewal of validity of the leased plot of land for ship-breaking are the key rating sensitivities. PPSBC, established as a partnership firm in 1992, is engaged in ship-breaking activity in the Alang?Sosiya belt of Bhavnagar region in Gujarat. Another group entity Alang Ship Breaking Corporation (ASBC; rated CARE BB/CARE A4+), a partnership firm, is also engaged in ship breaking activity in the same region. The partners of both the firms are family members and have experience of more than two decades in the ship breaking industry. Both the firms together have dismantled more than 60 ships till June 30, 2013. Based on audited financials, PPSBC reported a PAT of INR0.74 crore on a total operating income of INR83.32 crore during FY13 (refers to the period April 1 to March 31) as against a PAT of INR0.80 crore on a total operating income of INR87.22 crore during FY12. SHREE SAI: CARE Rates INR10cr Long-Term Loans at 'B+' ----------------------------------------------------- CARE assigns 'CARE B+' rating to the bank facilities of Shree Sai Developers. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Facilities 10 CARE B+ Assigned Rating Rationale The rating assigned to the bank facilities of Shree Sai Developers is primarily constrained on account of its modest booking status of its sole project 'Park woods' and resultant saleability risk coupled with inherent risk associated with the real estate industry. The constraints far outweigh the benefits derived from the experience of the partners in the real estate industry. The successful completion of the projects within the envisaged cost parameters along with timely receipt of the booking advances and sale of the balance units at envisaged prices are the key rating sensitivities. Vadodara-based, SSD was incorporated as a partnership firm in December 19, 2009. At the time of incorporation there were eight partners, out of whom five partners had retired and one new partner was admitted on June 27, 2011. Currently three partners, namely, Mr Nilesh Jashbhai Patel, Mr Jatinkumar Mahadev Patel and Ms Rachana Nilesh Patel are actively involved in the day to day operations. SSD is engaged in the real estate development and is currently executing its first residential project named 'Park Woods' at Vadodara, Gujarat which comprises of 11 towers with 404 flats (1 BHK and 2 BHK flats). Project is expected to complete by September 2015. The total saleable area of the project is 3.58 lakh sq ft (approximately). SSD has received approvals for land and other relevant clearances for the project. SHREE SIDDHI: CARE Assigns 'B' Rating to INR10cr LT Bank Loans -------------------------------------------------------------- CARE assigns 'CARE B' rating to the bank facilities of Shree Siddhi Vinayak Creations Private Limited. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank 10 CARE B Assigned Facilities Rating Rationale The rating assigned to the bank facilities of Shree Siddhi Vinayak Creations Private Limited is primarily constrained by its small scale of operations and weak financial risk profile as reflected by its low profitability margins, highly leveraged capital structure and weak coverage indicators. The ratings are further constrained by its working capital intensive nature of operations and its presence in a highly fragmented and competitive industry. The rating however draws strength from the experienced promoters and growing scale of operations. Going forward, the ability of the company to profitably scale up its operations with an improvement in the capital structure and effective management of its working capital would be the key rating sensitivities. Promoted by Mr. Anupam Kapoor and Mr. Anubhav Kapoor, Shree Siddhi Vinayak Creations Private Limited was incorporated in 1999. The company is engaged in the wholesale trading of ladies garment, mainly sari and suits. The company is carrying out its business operations from Bareilly (Uttar Pradesh). SSPL procures mainly from garment manufactures of Gujarat, Maharashtra, and also through agents. The company caters to the garment retailers mainly in the regions of Uttrakhand and Uttar Pradesh. During FY12 (refers to the period April 1 to March 31), SSPL achieved a total operating income (TOI) of INR47.30 crore with a Profit After Tax (PAT) of INR0.07 crore. During FY13 (based on unaudited results) the company achieved TOI and PAT INR51.88 crore and INR0.19 crore, respectively. SRI JAIBALAJI: CARE Reaffirms 'C' Rating on INR22.59cr Loans ------------------------------------------------------------ CARE reaffirms the ratings assigned to the bank facilities of Sri Jaibalaji Steel Rolling Mills Ltd. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank 22.59 CARE C Re-affirmed Facilities Rating Rationale The rating assigned to the bank facilities of Sri Jaibalaji Steel Rolling Mills Ltd is primarily constrained by the weak financial risk profile, highly leveraged capital structure, working capital intensive operations, vulnerability to fluctuations in input costs coupled with limited value addition leading to low margins and susceptibility to industry risk. The rating, however, draws comfort from the experienced promoters and established relationship with clients through direct selling. Going forward, the ability of Sri Jaibalaji Steel Rolling Mills Ltd to increase its scale of operations while improvising the profitability and effectively manage its working-capital requirements would be the key rating sensitivities. Sri Jaibalaji Steel Rolling Mills Limited is a closely held public limited company incorporated in June 2008. The company is promoted by Mr Shashank Jain, Mr Akash Kumar and Mr Gaurav Swarup, which started its commercial operations in August 2010 with an installed capacity of 60,000 MTPA of Thermo Mechanically Treated (TMT) Bars. SJB has manufacturing facility at Muzaffarnagar, UP, and sells its finished products under the brand name "Century" through direct sales (approximately 75%) to companies in real estate and infrastructure and the balance through dealer network established in western UP. SJB is a group associate of Sri Jaibalaji Ispat Private Limited (SJBI), which is engaged in the manufacturing of Mild Steel (M.S.) Ingots. In FY13-provisional (refers to the period April 1 to March 31), the company achieved a total operating income of INR105.49 crore and a PAT of INR0.37 crore as against a total operating income of INR104.68 crore and a PAT of INR1.15 crore in FY12. SUWARNA BUILDCON: CARE Places 'BB' Rating to INR13cr Bank Loans --------------------------------------------------------------- CARE assigns 'CARE BB' and 'CARE A4' ratings to the bank facilities of Suwarna Buildcon Pvt Ltd. Amount Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank 13 CARE BB Assigned Facilities Short-term Bank 7 CARE A4 Assigned Facilities Rating Rationale The ratings assigned to the bank facilities of Suwarna Buildcon Pvt Ltd are constrained by its small scale of operation, client concentration and geographical concentration of operations and delays in the ongoing projects. The ratings, however, derive strength from the wide experience of the promoters coupled with a long track record of operations, comfort from price escalation in execution of projects, moderate financial risk profile marked by increase in the profitability and comfortable capital structure. The ability of the company to execute the projects in a timely manner, increase and diversify its order-book across geography and clients without impacting its financial risk profile are the key rating sensitivities. Suwarna Buildcon Pvt Ltd was incorporated as a proprietorship concern in 1986 under the name and style of Suwarna Associates and in April 2011 was taken over by the promoter owned private limited company, Suwarna Buildcon Pvt Ltd. The company operates in the irrigation segment which includes construction of small to medium size weirs, barrages, dams, canals and minor bridges. The company also undertakes road work including construction of structures like rail over bridges, construction of roads and buildings and earth work (excavation and transport of sand and gravel). The company currently sub contracts work based on location and availability of its own labour and machinery. The sub-contracting cost includes labor and machinery leasing cost. The total order book contained 18 orders as on September 20, 2013 with an outstanding order value of about INR245 crore representing 4.78x of FY13 (refers to the period April 1 to March 31) total operating income. During provisional FY13, the company reported a total operating income of INR51.27 crore over a PAT of INR3.89 crore as against a total operating income of INR48.12 crore over a PAT of INR3.58 crore in FY12. ================= I N D O N E S I A ================= BUMI RESOURCES: Moody's Lowers Corporate Family Rating to 'Ca' -------------------------------------------------------------- Moody's Investors Service (Moody's) has downgraded PT Bumi Resources Tbk's (Bumi Resources) corporate family rating to Ca from Caa1, thereby concluding its review initiated on July 22, 2013. Moody's has also downgraded to Ca the ratings on its $300 million senior secured notes issued under Bumi Capital Pte. Ltd., and the $700 million senior secured notes issued under Bumi Investment Pte. Ltd. Both entities are wholly owned subsidiaries of Bumi Resources. The ratings outlook is stable. Ratings Rationale: The rating action reflects the high probability of near-term default for the thermal coal producer given its substantial upcoming debt maturities. As a result of its high leverage and weak liquidity, the company's recent announcement of an agreement with China Investment Corporation (CIC) to restructure $1.3 billion of outstanding indebtedness, largely through a debt-for- equity exchange, will be viewed as a distressed exchange under Moody's definition of default. "While Moody's expects the planned exchange to result in an immediate improvement in Bumi Resources' capital structure and a significant reduction in its interest burden, Moody?s believes it will only provide short-term relief, with further material debt maturities scheduled in 2014", says Brian Grieser, a Moody's Vice President -- Senior Analyst. "We also believe that -- in the absence of new bank or bond proceeds - Bumi Resources would only be able to address these maturities with additional asset sales, which would in turn further reduce available cash flows to existing bond holders from its two main coal mines, KPC and Arutmin," adds Grieser, who is also the lead analyst for Bumi Resources. After excluding CIC's debt, Bumi Resources will need to refinance over $800 million of maturities over the next 12 months, a task which could prove challenging, given the current pressure on its operations due to low coal prices and the reduction in cash flow following its sale of a 19% stake in KPC -- its largest coal mine -- to CIC. The agreement will exchange the existing debt into 42% of Bumi Resources' holding in Bumi Resource Minerals (BRMS); 19% of its holdings in each of KPC, Indocoal Resources and PT Indocoal Kaltim Resources; up to $150 million new shares in Bumi Resources; and $400 million in residual loans. The transaction is subject to regulatory approval as well as lender approval. The 19% interests in the coal assets are pledged as security in the common security documents. Bumi Resources is Indonesia's largest thermal coal producer and one of the three largest thermal coal exporters globally. Through its principal assets (a 65% stake in PT Kaltim Prima Coal before the exchange and a 70% stake in PT Arutmin), Bumi Resources produced 73 million tons of coal in 2012 and which accounted for approximately 19% of Indonesia's total coal production. Its non-coal resource holding company, Bumi Resources Minerals, was listed on the Indonesian Stock Exchange on 9 December 2010. Bumi Resources currently owns 87.09% of Bumi Resources Minerals (before the exchange). Bumi Plc, previously known as Vallar Plc, currently has a 29.2% stake in Bumi Resources. PROFESIONAL TELEKOMUNIKASI: S&P Rates Sr. Unsec. Bank Loan 'BB' --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' long-term issue rating to a senior unsecured bank loan by PT Profesional Telekomunikasi Indonesia (Protelindo: BB/Stable/--; axBBB-/--) and its 100%-owned subsidiary Protelindo Finance B.V. Protelindo unconditionally and irrevocably guarantees the loan, which constitutes three credit facilities: US$350 million facility A; EUR40 million facility B; and US$125 million revolving facility. All the facilities mature on May 19, 2018. The bank loan will rank pari passu with all of Protelindo's other present and future unsecured obligations. The company used the proceeds from facilities A and B and a drawdown from the revolving credit facility to refinance its borrowings under its bridge facility. It will use the unused portion of the revolving credit facility to meet its working capital requirements. The rating on Protelindo reflects the company's high leverage and moderately concentrated customer base, and the weak market position of its key customer, PT Hutchison CP Telecommunications. Protelindo's strong operating efficiency, stable cash flow and strong margins from long-term tower leases, and good market position temper these weaknesses. S&P assess the company's financial risk profile as "aggressive" and its business risk profile as "fair." ********* 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. 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