/raid1/www/Hosts/bankrupt/TCRAP_Public/131120.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, November 20, 2013, Vol. 16, No. 230
Headlines
A U S T R A L I A
COALPAC: Workers Can't Claim Entitlements Due to Receivership
GIPPSLAND SECURED: Bid to Rescue Collapses After Leaders Pull Out
HERVEY BAY: Receivers Move in on Units at Ramada Resort
INTEGRAL WEALTH: Ferrier Hodgson Appointed as Liquidator
NSW SUGAR: $2.5MM Loan Paid Back After Sale to Swiss Company
C H I N A
SHIMAO PROPERTY: Moody's Ups Corporate Family Rating to 'Ba2'
H O N G K O N G
PHYSICAL PROPERTY: Reports HK$43K Net Loss in Q3 Ended Sept. 30
I N D I A
ABHITECH ENERGYCON: CRISIL Puts 'BB' Ratings on INR100MM Loans
AISHWARYA PUBLICATIONS: CRISIL Suspend B- Ratings on INR150M Loan
ASSOCIATED MFG: CRISIL Cuts Ratings on INR80MM Loans to 'B'
ATHANI FARMERS: CARE Reaffirms 'BB' Rating on INR150.95cr Loans
ATLAS ALLOY: ICRA Assigns 'C+' Rating to INR2.84cr Term Loan
BAZARGAON PAPER: ICRA Assigns 'B' Ratings to INR8.66cr Loans
BENARA OVERSEAS: CARE Assigns 'C' Rating to INR6.33cr LT Loans
CORNILEUS PHARMA: CRISIL Ups Ratings on INR59.5MM Loans to 'B+'
FIL SEP: ICRA Reaffirms 'B+' Ratings on INR4.79cr Loans
GAL ALUMINIUM: ICRA Suspends 'B+' Rating on INR7.5cr Loans
GANGA BAG: ICRA Assigns 'BB-' Ratings to INR15.74cr Loans
GAYATHRI EXPORTS: CRISIL Suspends BB- Ratings on INR40MM Loans
GLOBE PANEL: CARE Assigns 'BB' Rating to INR9cr LT Bank Loans
GOLDSTONE CERAMIC: CRISIL Puts 'B' Ratings on INR46.6cr Loans
H.D. WIRES: ICRA Assigns 'BB+' Ratings to INR23.5cr Loans
HITECH EXTRUSION: ICRA Assigns 'B' Ratings to INR32.25cr Loans
INTERNATIONAL PUBLIC: CARE Rates INR6.4cr LT Bank Loans at 'B+'
JCBL LTD: CRISIL Upgrades Ratings on INR650MM Loans to 'B-'
JUHI ALLOYS: CARE Reaffirms 'B+' Rating on INR33cr LT Bank Loans
KAMMAN CORP: ICRA Cuts Rating on INR13cr LT Loans to 'BB+'
KANTILAL CHHAGANLAL: ICRA Cuts Rating on INR0.5cr Loan to 'BB'
KARLO AUTOMOBILES: ICRA Assigns 'B+' Rating to INR10cr Loan
KINGFISHER AIRLINES: Mallya's Investment Unit Cuts Shareholding
LALCHAND BUILDERS: CARE Rates INR13.36cr LT Bank Loans at 'B+'
LAXMI DIAMOND: ICRA Withdraws 'B+' Rating on INR11cr Loans
MAIHAR ALLOYS: CARE Rates INR9cr LT Bank Loans at 'B'
MEGHA BOTTLING: ICRA Raises Ratings on INR15.21cr Loans to 'BB+'
MILLENNIUM STARCH: CARE Rates INR23.76cr LT Bank Loans at 'B'
MODEL PUBLIC: ICRA Rates INR7.5cr Bank Loans at 'BB'
MULTIURBAN INFRA: ICRA Suspends 'B' Ratings on INR11.3cr Loans
NAVUTHAN EDUCATIONAL: CARE Rates INR40.30cr LT Loans at 'B'
NS PAPERS: ICRA Suspends 'B+' Rating on INR34.15cr Loans
PARTH PLASTPACK: ICRA Assigns 'B+' Ratings to INR6.6cr Loans
PRIME INDUSTRIES: CARE Raises Rating on INR7.01cr Loans to 'B+'
PRIYADARSHI PURNNADA: 'BB-' Rating on INR10.37cr Loan Reaffirmed
PROLIFIC PAPERS: ICRA Suspends 'B' Rating to INR35cr Loans
QUALITY WOVEN: ICRA Assigns 'BB' Ratings to INR16.38cr Loans
RAJU SPINNING: ICRA Cuts Ratings on INR57.83cr Loans to 'D'
RAS POLYTEX: ICRA Assigns 'BB' Ratings to INR10.77cr Loans
RIELLO PCI: CRISIL Upgrades Rating on INR50MM Loans to 'BB'
ROSELABS POLYMERS: CARE Cuts Ratings on INR65cr Loans to 'D'
RYDAK SYNDICATE: CARE Assigns 'BB' Rating to INR13.19cr Loans
SAGAR CEMENTS: CRISIL Cuts Ratings on INR2.95BB Loans to 'BB'
SEJASMI INDUSTRIES: CRISIL Reaffirms C Ratings on INR128.9MM Loan
SHETH AND POPAT: CARE Rates INR10cr LT Bank Loans at 'B+'
SHIV HEALTH: CARE Reaffirms 'BB' Rating on INR18.14cr LT Loans
SHREE ELECTROMELTS: CRISIL Suspends BB+ Rating on INR60MM Loan
SRINIVASA EDIFICE: ICRA Suspends 'D' Rating on INR22cr Loans
SUMINTER INDIA: ICRA Reaffirms 'BB+' Rating on INR30cr LT Loans
SUNDARAM STEELS: CARE Assigns 'B+' Rating to INR13.07cr Loans
SUSEE AUTO: ICRA Cuts Ratings on INR15.5cr Loans to 'B'
SWADHAAR FINSERVE: ICRA Rates INR30cr Debentures at 'BB'
SWARNSARITA GEMS: ICRA Rates INR8cr Long-Term Loans at 'BB'
SWARNSARITA JEWELLERS: ICRA Assigns 'BB' Rating to INR15cr Loans
TIJARIA POLYPIPES: ICRA Suspends 'BB-' Rating on INR50.45cr Loans
TRUBA EDUCATION: ICRA Suspends 'D' Rating on INR9cr Loans
VARIA ALUMINIUM: ICRA Suspends 'BB-' Ratings on INR80cr Loans
I N D O N E S I A
MNC SKY: Unit's $165MM Bond Redemption Credit Pos, Says Moody's
J A P A N
ASAHI MUTUAL: Fitch Affirms IFS Rating at 'BB'
N E W Z E A L A N D
CREDIT UNION: S&P Raises ICR to 'BB+'; Outlook Negative
PIKE RIVER: Labour Promises to Pay Full Court-Ordered Compo
S I N G A P O R E
BW GROUP: Covenant Headroom Improves on Repayment, Moody's Says
GLOBAL A&T: S&P Puts 'B' CCR on CreditWatch Negative
S O U T H K O R E A
HANJIN SHIPPING: Cuts Overall Operating Loss by 62% in Q3
LIG GROUP: To Sell Stake in Nonlife Insurance Unit
V I E T N A M
VIETNAM TOWN: SingHaiyi Group Acquires Firm Out of Receivership
X X X X X X X X
* Upcoming Meetings, Conferences and Seminars
- - - - -
=================
A U S T R A L I A
=================
COALPAC: Workers Can't Claim Entitlements Due to Receivership
-------------------------------------------------------------
ABC News reports that a union representing workers reportedly owed
entitlements by Coalpac said the company going into administration
has cut off legal options for getting the money.
The Construction, Forestry, Mining and Energy Union (CFMEU) said
it is representing four former employees, who it says are owed up
to AUD10,000 each in entitlements from when they were made
redundant in March, according ABC News.
The report notes that last month the Lithgow based company went
into administration.
The union's Graeme Osborne says it had started legal action, but
that avenue has now been cut off, the report relates.
"What our legal advice is, is that since Coalpac have gone into
administration the ability for us to pursue the avenue through the
legal system is also taken away due to the company going into
receivership. . . . So, unfortunately those four members have now
got no course of action to recover any lost entitlements," the
report quoted Mr. Osborne as saying.
"What I'm receiving from our national office legal team is that
once a company pulls down the shutters, there's some law in the
Corporations Act that says once that happens there's no the
requirement for proceeding or future legal cases is null and void
as well," Mr. Osborne said, the report relates.
The union said it is now investigating if the former employees can
be added to a list of the company's creditors, the report
discloses.
GIPPSLAND SECURED: Bid to Rescue Collapses After Leaders Pull Out
-----------------------------------------------------------------
ABC News reports that a group of Victorian business leaders has
given up the fight to save Gippsland Secured Investments (GSI).
Gippsland Secured went into receivership over solvency concerns in
September. The company did not have enough equity to cover a drop
in the value of its assets, according to ABC News.
The report relates that the GSI Rescue Group, made up of business
leaders from East Gippsland mounted a multi-million dollar rescue
package, hoping to recapitalize the company so it could keep
trading.
The report notes that the plan was one of three proposals put to
GSI note holders at meetings in October. The others involved
winding down GSI and selling off its loans, the report relays.
However, the report discloses, the group has given up the fight to
save the company, citing difficulties raising wholesale funds and
converting existing notes to the new business.
The group said GSI made an invaluable contribution to Gippsland
for more than 40 years and it will be sorely missed if it is
broken up and sold, the report notes.
HERVEY BAY: Receivers Move in on Units at Ramada Resort
-------------------------------------------------------
NewsMail reports that units at Hervey Bay's Ramada Resort and an
attached block of land are up for sale after receivers were
brought in.
The 15 units and the vacant land, near the Urangan Marina, were
handed over to the receivers 12 months ago, according to NewsMail.
The report relates that they are now being sold by Harcourts in
Hervey Bay and Ray White Hotels Australia, with expressions of
interest to close on December 5.
Ramada Resort developer and operator Tim Wright said the
receivership did not affect the hotel, restaurant or any of its
operating assets, the report notes.
Mr. Wright said the units handed over to receivers were still
occupied as normal, the report discloses.
Mr. Wright said he was still keen to continue with stage two of
the hotel, the report adds.
INTEGRAL WEALTH: Ferrier Hodgson Appointed as Liquidator
--------------------------------------------------------
Darren Weaver -- darren.weaver@fh.com.au -- of Ferrier Hodgson was
appointed Official Liquidator of Integral Wealth Managers Pty Ltd
on Nov. 7, 2013, pursuant to an Order by the Supreme Court of
Western Australia.
The Director has advised that the Company ceased trading shortly
prior to the appointment of the liquidator and the Financial
Services Licence has been cancelled.
The liquidator is conducting statutory investigations into the
Company's affairs.
Integral Wealth Managers Pty Ltd operated in the financial
services industry and was the holder of an Australian Financial
Services Licence.
NSW SUGAR: $2.5MM Loan Paid Back After Sale to Swiss Company
------------------------------------------------------------
My Daily News reports that Tweed Shire Council's AU$2.5 million
loan to the troubled Condong cogeneration plant has been repaid 15
years early.
It's a relief for the council as there had been fears the money
would have to be written-off after the Condong and Broadwater
bioenergy plants went into receivership in 2011, according to My
Daily News.
The report notes that the AU$220 million venture was recently sold
by the NSW Sugar Milling Cooperative to Swiss-based investment
company Capital Dynamics for an undisclosed sum.
Council's acting general manager Troy Green said when the venture
went into receivership the council could have exercised its parent
guarantee and called in the 20-year loan immediately, the report
relates.
But Mr. Green, the report discloses, said that might have scuttled
the project.
"We decided to wait and hope for someone with the skills and
expertise to sustain the industry and that's what happened," the
report quoted Mr. Green as saying.
The money was repaid to the council.
The report notes that the council's loan financed the construction
of the Condong tertiary treatment plant, pump station and pipe
work.
Depending on fuel supply, Capital Dynamics plans to run the
Condong and Broadwater bioenergy plants during the sugar cane off-
season, targeting peak pricing periods. Co-operative Chief
Executive Officer Chris Connors said no jobs would be lost in the
sale, the report notes.
The report discloses that NSW Canegrowers Association's Chairman
Wayne Rogers said the sale gave certainty for growers and the
industry's future. The co-op cited depressed green energy prices
as a major reason for the plant's failure, the report adds.
=========
C H I N A
=========
SHIMAO PROPERTY: Moody's Ups Corporate Family Rating to 'Ba2'
-------------------------------------------------------------
Moody's Investors Service has upgraded Shimao Property Holdings
Limited's corporate family rating to Ba2 from Ba3 and senior
unsecured bond rating to Ba3 from B1.
The ratings outlook is stable.
Ratings Rationale:
"The upgrade reflects Moody's expectation that Shimao's good sales
execution will be maintained," says Franco Leung, a Moody's
Assistant Vice President and Analyst.
Shimao has demonstrated a good track record of sales execution
since it fine-tuned its business strategy in 2011. Its strong
sales are the result of its increased focus on small- to medium-
sized products for the mass market that target first-time home
buyers and up-graders.
In the first ten months of 2013, Shimao achieved RMB55.6 billion
in contracted sales -- a 41.7% year-on-year increase -- exceeding
its annual sales target of RMB55 billion for 2013.
Given that the company has revised its internal management systems
on data management, decision making and performance evaluations,
it will be well equipped to sustain strong sales growth in its
expanding project portfolio for the next 12--18 months.
"Moreover, Shimao's financial profile in the next 12--18 months
will also improve," adds Leung, who is also Shimao's Lead Analyst.
Shimao has reduced its debt leverage through liquidity derived
from strong contracted sales. Its adjusted debt/total
capitalization declined to about 53% at end-June 2013 from 56.7%
at end-2011.
Moody's expects Shimao to grow in scale in the next 12--18 months.
Its construction borrowings will increase, but its debt leverage
will be kept at around 53%-55%.
Its current contracted sales -- when recognized in the next 12--18
months -- will result in an improvement in its interest coverage
to 3.0x--3.5x.
"Also supporting the upgrade is Shimao's improved liquidity
position and debt maturity profile," says Leung.
Shimao has enjoyed good access to offshore bank financing and the
capital markets. It has lengthened its debt maturity profile this
year through raising term bank debts and bonds.
Moreover, it has employed a more cautious short-term debt
management approach.
At end-June 2013, the company had RMB18.9 billion of cash-on-hand,
which was sufficient to cover 1.75x of its RMB10.8 billion in
short-term debt.
Moody's expects the company will maintain such coverage above 1.3x
for the next 12--18 months.
Shimao's Ba2 corporate family rating continues to reflect its (1)
diversified and well-located land bank; (2) pricing flexibility in
view of its low-cost land bank, and (3) portfolio of quality
investment properties.
Upward rating pressure could emerge if Shimao (1) continues to
deliver robust sales growth; (2) maintains strong liquidity and
good access to domestic and offshore bank and capital markets; (3)
shows prudent financial management and land acquisitions.
Credit metrics indicative of upgrade pressure include EBITDA
interest coverage above 3.5x-4.0x and debt leverage below 50% on a
sustained basis.
On the other hand, downgrade rating pressure could emerge if (1)
the company is unable to sustain its solid sales track record; (2)
its liquidity position weakens; or (3) it embarks on aggressive
land acquisitions funded by debt.
Credit metrics indicative of downgrade pressure include EBITDA
interest coverage failing to reach 3x-3.5x or debt/total
capitalization increasing to 55% or above.
Shimao Property Holdings Ltd is a Grand Cayman-incorporated
Chinese property developer that was listed on the Hong Kong Stock
Exchange in July 2006. Together with its 64%-owned Shanghai A-
share listed subsidiary, Shanghai Shimao Co Ltd, the company has
an attributable land bank of 37.2 million square meters
distributed across 36 cities, mainly in eastern and northeastern
China. Shanghai Shimao mainly develops commercial properties and
has an attributable land bank of around 7.03 million square
meters. Shimao also has six hotels in operation with a total of
2,700 rooms.
================
H O N G K O N G
================
PHYSICAL PROPERTY: Reports HK$43K Net Loss in Q3 Ended Sept. 30
---------------------------------------------------------------
Physical Property Holdings Inc. filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q, reporting a
net loss and total comprehensive loss of HK$43,000 on HK$278,000
of total operating revenues for the three months ended Sept. 30,
2013, compared to a net loss and total comprehensive loss of
HK$223,000 on HK$781,000 of total operating revenues for the same
period last year.
The Company's balance sheet at Sept. 30, 2013, showed HK$9.73
million in total assets, HK$11.48 million in total liabilities,
and stockholders' deficit of HK$1.75 million.
The Company had negative working capital of HK$11,440,000 as of
September 30, 2013, and incurred losses of HK$223,000 and
HK$373,000 for the nine months ended September 30, 2013, and 2012,
respectively. These conditions raised substantial doubt about the
Company's ability to continue as a going concern.
A copy of the Form 10-Q is available at:
http://is.gd/Huxam2
About Physical Property
Located in Hong Kong, Physical Property Holdings Inc., through its
wholly-owned subsidiary, Good Partner Limited, owns five
residential apartments located in Hong Kong. The Company was
incorporated in the State of Delaware.
=========
I N D I A
=========
ABHITECH ENERGYCON: CRISIL Puts 'BB' Ratings on INR100MM Loans
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL BB/Stable' rating to the long term
bank facilities of Abhitech Energycon Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 33.5 CRISIL BB/Stable
Cash Credit 45.0 CRISIL BB/Stable
Proposed Long-Term
Bank Loan Facility 21.5 CRISIL BB/Stable
The rating reflects AEL's promoter's extensive experience in the
fuel additives products industry and diversified and well
established clientele base. The above average financial risk
profile, marked by low gearing and comfortable debt protection
metrics support the rating. These rating strengths are partially
offset by AEL's modest scale of operations and large working
capital requirements.
Outlook: Stable
CRISIL believes that AEL will benefit over the medium term from
the extensive industry experience of its promoters. The outlook
may be revised to 'Positive' in case the company reports
significantly higher-than-expected revenues while maintaining its
profitability and capital structure. Conversely, the outlook may
be revised to 'Negative' in case there is significant decline in
AEL's revenues or profitability, or if its financial risk profile
deteriorates significantly, due to a large debt funded capital
expenditure or due to stretch in its working capital cycle.
AEL was incorporated on October 10, 1997 as Abhitech Energycon
Services Private Limited. In 2003, the company was reconstituted
as a public company and was renamed as Abhitech Energycon Limited.
The company is promoted by Mr. Ganesh Samant, Mr. Vivek Pandit,
Mr. Prasad Samant, Mr. Vijay Kamble and Mr. Hemant Mohite. The
company is engaged in business of manufacturing of fuel additives
for solid and liquid fuels. The company's manufacturing unit is
based in Baddi (Himachal Pradesh), and registered office in Mumbai
(Maharashtra).
AEL reported a profit after tax (PAT) of INR10.7 million on net
sales of INR461.3 million for 2012-13 (refers to financial year,
April 1 to March 31), against a PAT of INR0.1 million on net sales
of INR323.5 million for 2011-12.
AISHWARYA PUBLICATIONS: CRISIL Suspend B- Ratings on INR150M Loan
-----------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
Aishwarya Publications Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft Facility 35 CRISIL B-/Stable Suspended
Proposed Long-Term
Bank Loan Facility 60 CRISIL B-/Stable Suspended
Term Loan 55 CRISIL B-/Stable Suspended
The suspension of ratings is on account of non-cooperation by APPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, APPL is yet to
provide adequate information to enable CRISIL to assess APPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'.
APPL publishes AAT, which is an Indian Newspaper Society (INS)-
accredited English biweekly newspaper exclusively for employment
opportunities abroad primarily in the Middle East. The company was
promoted by Mr. N R K Pillai and his wife, Mrs. Jyothy
Radhakrishnan in April 1999, both of whom have been associated
with this field for two decades. Mr. N R K Pillai currently
handles the day-to-day affairs of the company.
ASSOCIATED MFG: CRISIL Cuts Ratings on INR80MM Loans to 'B'
-----------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Associated Manufacturing Company to 'CRISIL B/Stable' from
'CRISIL B+/Stable' and has reaffirmed its rating on the firm's
short-term facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 55 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
Letter of Credit 20 CRISIL A4 (Reaffirmed)
Term Loan 25 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
The rating downgrade reflects the sharp deterioration in AMC's
financial risk profile, driven by significantly lower-than-
expected accruals due to unanticipated losses. Sluggish demand in
the automobile industry has resulted in muted revenue growth for
the firm and a year-on-year decline in its operating margin by
over 840 basis points to 5.5 per cent in 2012-13 (refers to
financial year, April 1 to March 31). This resulted in a net loss
of INR9 million for the year. AMC's accruals declined to INR6
million in 2012-13 as against INR22 million in the previous year.
Additionally, its debt protection metrics deteriorated, with
interest coverage and net cash accruals to total debt ratios at
0.9 times and 0.05 times, respectively, for 2012-13. The firm's
ability to ramp up operations and improve profitability, and
infuse fresh funds to shore up its liquidity will determine the
rating direction over the medium term.
The ratings reflect AMC's weak financial risk profile, marked by a
modest net worth, high gearing, and weak debt protection metrics,
its small scale of operations, and the susceptibility of its
operating margin to volatility in raw material prices. These
rating weaknesses are partially offset by the extensive experience
of AMC's promoters in the automotive parts industry, and its
established relationships with customers.
Outlook: Stable
CRISIL believes that AMC will continue to benefit over the medium
term from the extensive industry experience of its promoters. The
outlook may be revised to 'Positive' if the firm significantly
scales up its operations and improves its operating margin, or if
the promoters infuse a large quantum of capital, leading to
improvement in its financial risk profile. Conversely, the outlook
may be revised to 'Negative' if AMC's liquidity comes under
further pressure due to continued decline in profitability or
deterioration in working capital management, or if the firm
undertakes any large new debt-funded capital expenditure
programme.
AMC was established in 1983 by Mr. Ashvin Shah, Mr. Subhash
Chuttar, and Mr. Shyam Jain. The firm manufactures stamped and
pressed parts for automobiles, including brake boosters, latch
assemblies for seats, header plates for radiators, and door lock
assemblies at its unit in Chakan (Maharashtra). AMC supplies to
Tier-1 players in the automotive industry, such as Bosch Chassis
Systems Ltd, Tata Toyo Radiator Ltd (rated 'CRISIL AA-
/Stable/CRISIL A1+'), Johnson Controls Automotive Ltd ('CRISIL AA-
/Stable'), Tata Autocomp Systems Ltd, and Force Motors Ltd.
For 2012-13, AMC reported a net loss of INR9 million on an
operating income of INR311 million, against a net profit of INR6
million on an operating income of INR304 million for 2011-12.
ATHANI FARMERS: CARE Reaffirms 'BB' Rating on INR150.95cr Loans
---------------------------------------------------------------
CARE re-affirms the ratings assigned to the bank facilities of
Athani Farmers Sugar Factory Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 150.95 CARE BB Re-affirmed
Facilities
Short-term Bank 86.50 CARE A4 Re-affirmed
Facilities
Rating Rationale
The ratings continue to be constrained by the ongoing debt funded
capex for distillery expansion and bio-methanation plant resulting
in deterioration in gearing levels and debt coverage indicators of
Athani Farmers Sugar Factory Limited. The ratings are further
constrained by the cyclical nature of the sugar industry coupled
with the stringent regulatory norms signifying dependence on the
government policies. However, the ratings continue to derive
strength from the long track record and experience of the
promoters in the sugar industry, moderate scale of operations,
successful operations of the co-generation power plant, thereby,
making it a fully integrated cane processing plant and improvement
in profit margins. The ratings also factor in the benefits arising
from the partial de-regulation and the cane development
initiatives taken by the company during FY13 (refers to the period
April 1 to March 31). The ability of the company to improve its
operating performance and improve its debt protection metrics is
the key rating sensitivity.
Athani Farmers Sugar Factory Limited, incorporated in November
1995, has set up a fully integrated sugar factory with an
installed capacity of 4,500 tones crushed per day (TCD) sugar
crushing plant and 30 kilo liters per day (KLDP) of distillery
plant. To mitigate the seasonal and cyclical impact of the sugar
business, the company has successfully set up a bagasse-fired
cogeneration plant of 24 mega watt (MW) and commenced commercial
operations from November 1, 2012.
During FY13 (refers to the period April 1 to March 31), AFSF
achieved a PBILDT and a net profit of INR35.32 crore and INR6.93
crore, respectively, on a total income of INR203.49 crore compared
with a PBILDT and a net profit of INR30.69 crore and INR11.07
crore, respectively, on a total income of INR289.50 crore in FY12.
ATLAS ALLOY: ICRA Assigns 'C+' Rating to INR2.84cr Term Loan
------------------------------------------------------------
ICRA has assigned an '[ICRA]C+' rating to the INR2.846 crore fund
based bank facilities of Atlas Alloy (India) Private Limited. ICRA
has also assigned an '[ICRA]A4' rating to the INR9.00 crore fund
based and INR3.05 crore non fund based bank facilities of AAIPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit- 2.846 [ICRA]C+ assigned
Term Loan
Fund Based Limit- 5.00 [ICRA]A4 assigned
OBD against LC
Fund Based Limit- 4.00 [ICRA]A4 assigned
Cash Credit
Non Fund Based 3.05 [ICRA]A4 assigned
Limit-Letter of
Credit
The rating action takes into account the experience of the
promoters in battery business, AAIPL's diversified product profile
across multiple user industries including industrial and
automotive and healthy demand outlook for the inverter and UPS
batteries given the power shortage in India. The ratings, however,
considers AAIPL's weak financial profile characterised by low net
margin, high gearing and low coverage indicators, high working
capital intensity of operation on account of high level of
inventory maintained and vulnerability of its profitability to
volatility in lead prices to an extent. The ratings also take into
consideration high competition intensity in the business on
account of presence of large number of players in the organised
and unorganised sector and seasonality of operation of players
including AAIPL as demand for inverter batteries peaks in summer
season.
Incorporated in 1990, AAIPL is involved in manufacturing of
batteries like automotive, tubular, valve-regulated lead-acid
(VRLA) and batteries for electric two wheelers having a capacity
to manufacture around 2,60,000 batteries per annum. The
manufacturing facility is located at Beawar, Rajasthan. The
company sells its products under the brand names of Grand, Trend
Setter, Sukui and Misko.
Recent Results
The company has reported a net profit of INR0.09 crore
(provisional) on an operating income of INR15.18 crore
(provisional) during 2012-13; as compared to a net profit of
INR0.04 crore on an operating income of INR10.75 crore during
2011-12.
BAZARGAON PAPER: ICRA Assigns 'B' Ratings to INR8.66cr Loans
------------------------------------------------------------
ICRA has assigned a long-term rating of '[ICRA]B' to the INR2.41
crores* term loan facility and INR6.25 crore fund based facility
of Bazargaon Paper & Pulp Mills Private Limited. ICRA has also
assigned a short-term rating of '[ICRA]A4' to the INR2.55 crores,
short term non-fund based limits of BPPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund 6.25 [ICRA]B assigned
Based Limits
Term Loans 2.41 [ICRA]B assigned
Short Term Non- 2.55 [ICRA]A4 assigned
Fund Based Limits
The ratings are constrained on account of the modest size of
operations of the company and modest profitability margins, along
with tight liquidity position resulting in almost entire
utilisation of working capital bank limits in recent months. The
ratings also factor in the lack of product diversification,
vulnerability of the contribution margins and profitability of the
company to waste paper price fluctuations and currency
fluctuations as well as intense competitive pressures in the
industry, especially for lower BF (Burst Factor) category kraft
paper.
The ratings are however supported by the long track record of the
company in the kraft paper business; healthy demand indicators
from end-user industries; and its established customer base with
majority of the sales to manufacturers of corrugated boxes.
Bazargaon Paper and Pulp Mills Private Limited (BPPL) was
incorporated in 1982 and started commercial production of the
kraft paper from 1989. The company has its manufacturing unit
located in Nagpur (Maharashtra). It commenced with a production
capacity of 2,500 TPA in 1989 which was enhanced to 30,000 TPA. It
manufactures kraft paper of various grades viz. 14 BF, 16 BF, 18
BF, 22 BF, 24 BF and 28 BF.
The promoters of BPPL had ventured into the paper industry in 1979
by setting up Apex Paper Mills which has a plant adjacent to BPPL
in Nagpur. Over the years, the promoters have incorporated several
companies and have setup plants at different locations to cater to
the different markets. The major group companies of BPPL are Apex
Paper Mills (Nagpur, plant with an installed capacity of 6,250
MTPA, but currently non-operational); Decor paper Mills
(Hyderabad, 60,000 MTPA); New Bombay Paper Mill Pvt Ltd. (New
Mumbai, 8,750 MTPA) and Kolar Paper Mill (plant being setup at
Tirupati, Hyderabad with an installed capacity of 100,000 MTPA).
Recent Results
For the year FY 12, the company reported an operating income of
INR36.20 crore and profit after tax of INR0.46 crore. For the year
FY 13, the company reported an operating income of INR36.85 crore
and profit after tax of INR0.33 crore.
BENARA OVERSEAS: CARE Assigns 'C' Rating to INR6.33cr LT Loans
--------------------------------------------------------------
CARE assigns 'CARE C' rating to the bank facilities of Benara
Overseas Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 6.33 CARE C Assigned
Facilities
Rating Rationale
The rating assigned to the bank facilities of Benara Overseas
Limited is primarily constrained by its low net-worth base, short
track record of operations coupled with weak financial
risk profile characterized by loss making operations, the
leveraged capital structure, stressed coverage indicators and weak
liquidity position. The rating also factors in the dependence of
the company on the automobile industry and the inherent
cyclicality associated with it.
The ratings, however, draw strength from the experienced
management. Going forward, the ability of the company to increase
the scale of operations while achieving envisaged profitability
levels and improving the overall financial risk profile would be
the key rating sensitivities.
Benara Overseas Limited was incorporated in October, 1995 under
the name of BAPL Finance & Investment Limited. The name was
changed to BOL in November, 2005 and the company commenced its
commercial operations in January, 2011. Currently it is being
managed by Mr Sanjay Benara and Mr Abhay Benara. BOL is engaged in
the manufacturing of S G Iron casting for the automotive industry
and has installed a capacity of 5,000 tons per annum (TPA) of S.G.
Iron casting at its manufacturing facility located at Solapur,
Maharashtra.
The main raw materials are pig iron, cold rolled steel scrap and
other metals like silicon, manganese, etc, which are procured from
dealers and manufacturers located in Maharashtra. BOL sells its
products directly to manufacturers of various auto components
located in Maharashtra. Besides BOL, Benara Group consists of
Benara Autos Private Limited (CARE B+/A4), engaged in
automobile bushes and bearings business since 1985 and Benara
Metrab Limited, engaged in the manufacturing of rubber parts etc.
For FY12 (refers to the period April 1 to March 31), BOL achieved
a total operating income of INR0.82 crore with a net loss of
INR0.42 crore. Moreover, for FY13 (as per the unaudited results),
BOL achieved a total operating income of INR1.40 crore with a net
loss of INR0.73 crore.
CORNILEUS PHARMA: CRISIL Ups Ratings on INR59.5MM Loans to 'B+'
---------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Cornileus Pharmaceuticals Pvt Ltd to 'CRISIL B+/Stable' from
'CRISIL B-/Stable', and has reaffirmed the rating on the company's
short-term bank facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1.5 CRISIL A4 (Reaffirmed)
Cash Credit 50.0 CRISIL B+/Stable (Upgraded
from 'CRISIL B-/Stable')
Foreign Discounting
Bill Purchase 80.0 CRISIL A4 (Reaffirmed)
Letter of Credit 50.0 CRISIL A4 (Reaffirmed)
Long-Term Loan 9.5 CRISIL B+/Stable (Upgraded
from 'CRISIL B-/Stable')
The rating upgrade reflects an improvement in CPPL's liquidity
profile supported by its prudent working capital management.
CPPL's expected net cash accruals of around INR16 million in 2013-
14 (refers to financial year, April 1 to March 31) are likely to
be adequate to meet its debt obligations of around INR4.5 million
over the period. The company's business risk profile is supported
by stable orders from its customers, and sustenance of its
moderate operating profitability. CPPL has recorded revenues of
around INR590 million during 2012-13 while its operating
profitability was around 7.9 per cent for 2012-13. In the absence
of any debt-funded capital expenditure (capex) programme, CPPL's
gearing is expected to improve to around 2 times as on March 31,
2014, from 2.50 times as on March 31, 2013.
The ratings continue to reflect CPPL's small scale of operations
in the intensely competitive pharmaceuticals industry; the
company's weak financial risk profile, marked by high gearing; and
its weak debt protection metrics. The ratings also factor in
CPPL's large working capital requirements. These rating weaknesses
are partially offset by the extensive experience of CPPL's
promoters in the pharmaceuticals industry; and the company's
established relations with customers and suppliers.
Outlook: Stable
CRISIL believes that CPPL will continue to benefit over the medium
term from the promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the company sustainably
improves its scale of operations and profitability, thereby
improving its financial risk profile. Conversely, the outlook may
be revised to 'Negative' if CPPL's financial risk profile
deteriorates because of aggressive debt-funded expansions or its
liquidity weakens due to any additional delay in receivables or
subdued cash accruals.
CPPL was set up in 2000 by Mr. N Subba Rao and Mr. N Kiran Kumar.
The company manufactures pharmaceutical pellets.
CPPL reported a provisional profit after tax (PAT) of INR11.6
million on net sales of INR571.1 million for 2012-13, vis-…-vis a
PAT of INR10.2 million on net sales of INR566.7 million for 2011-
12.
FIL SEP: ICRA Reaffirms 'B+' Ratings on INR4.79cr Loans
-------------------------------------------------------
ICRA has reaffirmed '[ICRA]B+' rating assigned to the INR4.79
crore (enhanced from INR4.74 crore) long term fund based
facilities of FIL SEP Equipments Private Limited. ICRA has also
reaffirmed '[ICRA]A4' rating assigned to the INR3.50 crore
(enhanced from INR2.60 crore) short term non fund facilities of
FSEPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loans 1.79 [ICRA]B+ reaffirmed
Cash Credit 3.00 [ICRA]B+ reaffirmed
Bank Guarantee 3.00 [ICRA]A4 reaffirmed
Letter of Credit 0.50 [ICRA]A4 reaffirmed
The reaffirmation of the ratings takes into account the small
scale of operations of the company; the high competitive intensity
in the filtration and lubrication systems business on account of
high fragmentation and the highly working capital intensive nature
of operations. The ratings continue to take into account the
project based nature of the company's business, leaving it
vulnerable to down cycles in its end-user industries;
vulnerability of its profitability to unfavourable variations in
prices of key raw materials and its limited ability to pass on
cost increases to customers due to fixed price nature of
contracts. The ratings also take into account the high contingent
liabilities in case of non-performance on its contracts.
The ratings, however continue to positively consider the past
experience of the promoter in the industry; the favourable long
term demand prospects for the end-user sectors; and the
established supply relationships of the company with reputed
clientele comprising leading MNCs and PSUs. The ratings also take
into account the potential growth in revenues, following the
relocation of its manufacturing facilities.
FIL SEP Equipments Pvt Ltd started as a proprietorship concern in
1996 promoted by Mr. Aalap Shirishbhai Derasary and was engaged in
trading of filter cartridges. It later ventured into manufacturing
of filtration vessels and lubrication skids. In 2009, FSEPL was
incorporated as a private limited company to take over the
business of the proprietorship. FSEPL has its manufacturing
facility at GIDC, Vadodara and is engaged in design, engineering,
manufacturing, fabrication and supply of Lubrication & Fluid
Systems and Filtration & Separation Systems.
Recent Results
For the financial year 2012-13, the company reported an operating
income of INR5.14 Cr. and profit after tax of INR0.37 Cr. as
against an operating income of INR9.34 Cr. and profit after tax of
INR0.61 Cr. for the financial year 2011-12.
GAL ALUMINIUM: ICRA Suspends 'B+' Rating on INR7.5cr Loans
----------------------------------------------------------
ICRA has suspended '[ICRA]B+' rating assigned to the INR7.50 crore
long term fund based facilities of Gal Aluminium Extrusion Private
Limited.
The suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
According to its suspension policy, ICRA may suspend any rating
outstanding if in its opinion there is insufficient information to
assess such rating during the surveillance exercise.
Incorporated in 1993, GAEPL is engaged in manufacturing of
Aluminium Extrusion products like bar, pipes, sections and rods.
The products have applications in Power, Transport, Consumer
Durables and Construction sectors. The company was formed by Mr.
Parasmal Lodha and Mr. Ranjendra Lodha, who had interests in fruit
trading, plywood trading and cold storage facilities. Mr. Rajendra
Lodha had researched on setting up aluminium extrusion facility
and they had no prior experience in the industry.
GANGA BAG: ICRA Assigns 'BB-' Ratings to INR15.74cr Loans
---------------------------------------------------------
The rating of '[ICRA]BB-' has been assigned to the INR15.5 crore
long-term, fund-based facilities and the INR0.24 crore term loans
of Ganga Bag Udyog Private Limited. The outlook on the long-term
rating is Stable. The rating of '[ICRA]A4' has also been assigned
to INR3 crore short-term non-fund based facilities of GBUPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-Term Fund- 15.50 [ICRA]BB- (Stable) assigned
based Limits
Term Loan 0.24 [ICRA]BB- (Stable) assigned
Letter of Credit 1.50 [ICRA]A4 assigned
Bank Guarantee 1.50 [ICRA]A4 assigned
The ratings are constrained by the highly competitive nature of
the industry with low entry barriers and limited product
differentiation, and vulnerability of profitability to
fluctuations in polymer prices. The ratings also factor in the
company's sector concentration risks and low bargaining power with
customers and suppliers. The financial profile is characterised by
low profitability, high gearing and modest debt coverage
indicators. Further, the liquidity position of the company is weak
as reflected by high utilisation of working capital limits, which
is partly on account of advances provided to group company Shanti
Global Concast. The ratings, however, favourably factor in the
established track record of the promoters in the HDPE/PP woven
sacks industry, the favourable long-term demand prospects from the
fertiliser and cement industries, and the company's established
customer base in Uttar Pradesh. The company is a part of the Ganga
Group, with other group entities also engaged in polywoven sacks
manufacturing leading to synergies in procurement of raw
materials. Going forward, the ability of the company to sustain
its revenues and improve its profitability, thereby leading to an
improvement in the debt coverage metrics would be the key rating
sensitivities.
Ganga Bag Udyog Private Limited, incorporated as a proprietorship
concern of Mr. R.K. Chaudhary in 1983 to supply jute bags to
cement companies, was reconstituted in the year 1994 as a private
limited company. Later, GBUPL began manufacturing and supplying
plastic woven sacks to the fertiliser and cement industry in UP.
In 2003, GBUPL inducted the Tulsyan family as directors and the
company took over the plastic woven sacks manufacturing plant of
Essel Mining at Jagdishpur, Lucknow. The plant was established as
a unit of GBUPL under the name of Quality Packaging. Later, GBUPL
established another unit by the name of Shree Packaging at
Varanasi in the year 2005. Currently, GBUPL, through its sub-units
(which form a part of the company and do not operate as
subsidiaries) Quality Packaging and Shree Packaging, is engaged in
the manufacturing of various types of high density polyethylene
(HDPE) as well as polypropylene (PP) bags and sacks, which are
primarily supplied to fertiliser manufacturers in UP and
neighbouring states. The combined capacity of the company is 17000
metric tonnes per annum (MTPA).
Ganga Group is a collaboration of the Chaudhary and Tulsyan
families. The group is engaged in various businesses: polywoven
sacks through the entities GBUPL, Neel Kamal Polytex Industries
Private Limited, Quality Woven Sacks Private Limited and RAS
Polytex Private Limited; paper through the entities Ganga Papers
India Limited and Ganga Pulp & Papers Private Limited; and sponge
iron and billet manufacturing through Shanti Gopal Concast
Limited.
In 2012-13, GBUPL reported a net profit of INR0.14 crore on an
operating income of INR89.77 crore against net profit of INR0.34
crore on an operating income of INR88.33 crore in 2011-12.
GAYATHRI EXPORTS: CRISIL Suspends BB- Ratings on INR40MM Loans
--------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Gayathri Exports.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Purchase-
Discounting Facility 30 CRISIL A4+ Suspended
Cash Credit 2.5 CRISIL BB-/Stable Suspended
Cheque Discounting 1.0 CRISIL A4+ Suspended
Packing Credit in
Foreign Currency 175.0 CRISIL A4+ Suspended
Pledge Loan 30.0 CRISIL BB-/Stable Suspended
Proposed Packing 14.0 CRISIL A4+ Suspended
Credit
Term Loan 7.5 CRISIL BB-/Stable Suspended
The suspension of ratings is on account of non-cooperation by GE
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, GE is yet to
provide adequate information to enable CRISIL to assess GE's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
GE was set up by Mr. Prabhakar Kamath and his family in 1997 and
is based in Karkala Taluk, Mangalore (Karnataka). It processes and
trades cashews nut. Over 50 per cent of its total revenues are
from the domestic market, and the rest from exports to the Gulf
countries, US, and Europe.
GLOBE PANEL: CARE Assigns 'BB' Rating to INR9cr LT Bank Loans
-------------------------------------------------------------
CARE assigns 'CARE BB' and 'CARE A4+' ratings to the bank
facilities of Globe Panel Industries India Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 9 CARE BB Assigned
Facilities
Short-term Bank 1 CARE A4+ Assigned
Facilities
Rating Rationale
The ratings assigned to the bank facilities of Globe Panel
Industries India Private Limited are primarily constrained by its
small scale of operations coupled with low profitability margins
and working capital intensive nature of business operations. The
ratings are further constrained by GPIL's presence in a highly
fragmented industry characterized by intense competition.
The ratings, however, draw comfort from the experienced promoters
and comfortable capital structure.
Going forward, GPIL's ability to scale up its operations while
improving its profitability margins and effective working capital
management shall be the key rating sensitivities.
Globe Panel Industries India Private Limited was incorporated in
April 2010 as a private limited company promoted by the Aggarwal
Family. The company took over the existing business of six group
associates engaged in similar line of activity. GPIL is currently
engaged in the manufacturing of plywood, block-boards, veneers,
laminates and formaldehyde which find its application in the
furniture industry. The company sells its products under its own
brand name 'gl'. The company has five units, all of which are
located in Yamuna Nagar, Haryana. The main raw materials used by
the company are veneer, timber and methanol (used in the chemical
treatment of mica). The company sells its products to dealers
mainly located in Mumbai, Delhi, Haryana Punjab and Uttar Pradesh.
During FY13 (refers to the period April 1 to March 31), GPIL
achieved a total operating income (TOI) of INR40.30 crore with a
Profit After Tax (PAT) of INR0.34 crore as against TOI of INR40.46
crore and PAT of INR0.17 crore in FY12.
GOLDSTONE CERAMIC: CRISIL Puts 'B' Ratings on INR46.6cr Loans
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of Goldstone Ceramic Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 26.6 CRISIL B/Stable
Bank Guarantee 8.5 CRISIL A4
Cash Credit 20.0 CRISIL B/Stable
The ratings reflect GSCPL's modest scale of operations in the
highly competitive ceramics industry, and its large working
capital requirements. The rating also factors in the company's
average financial risk profile, marked by high gearing and
moderate debt protection metrics. These rating weaknesses are
partially offset by the promoters' extensive experience in the
ceramics industry, and the proximity of the company's
manufacturing facilities to the availability of raw material and
labour.
Outlook: Stable
CRISIL believes that GSCPL will benefit from its promoters'
experience in the ceramic industryThe outlook may be revised to
'Positive' if GSCPL improves its scale of operations along with
sustained profitability leading to larger than expected cash
accruals; or improves its working capital management. Conversely,
the outlook maybe revised to 'Negative' if the firm's accruals are
lower than expectations due to reduced order flow or
profitability, or if the firm's financial risk profile
deteriorates due to stretch in working capital or higher than
expected, debt funded capex
GSCPL was incorporated in 2010, and is promoted by the Morbi-based
Kalariya family. The company manufactures wall tiles, at its
production facilities in Morbi (Gujarat), with an installed
capacity of 6000 boxes per day. Most of the promoters have around
ten years of experience in the ceramic industry.
GSCPL, on a provisional basis, reported a net profit of INR0.8
million on sales of INR94.9 million for 2012-13 (refers to
financial year, April 1 to March 31); and net profit of INR2
million on net sales of INR149.7 million for 2011-12.
H.D. WIRES: ICRA Assigns 'BB+' Ratings to INR23.5cr Loans
---------------------------------------------------------
ICRA has assigned a long-term rating of '[ICRA]BB+' to INR23.50
crore bank facilities of H. D. Wires Private Limited. ICRA has
also assigned a short term rating of '[ICRA]A4+' to the INR3.75
crore non-fund based limits of HDW. The outlook on the long term
rating is stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 22.50 [ICRA]BB+ assigned
Unallocated 1.00 [ICRA]BB+ assigned
Non Fund Based Limits 3.75 [ICRA]A4+ assigned
The assigned ratings take into consideration HDW's established
operational track record in the business of manufacturing low
carbon steel wires and galvanized wires; long experience of the
promoters in the business; and the company's established
relationships with reputed customers such as Universal Cables
Limited, Thermo Cables Limited, Havells India Limited, KEI
Industries Limited, Larsen and Toubro Limited etc. which has
enabled it to secure healthy revenue growth over the years
(operating income has increased from INR38.2 crore in FY2010 to
INR100.2 crore in FY2013). The revenue growth momentum has also
been supported by regular forward integration initiatives taken by
the company as it has consistently added new products to its
portfolio. The ratings also derive comfort from the support of the
promoters by way of infusion of equity and interest free unsecured
loans. The ratings factor in expected conversion of unsecured
loans from promoter group of INR8 crore (as on March 31, 2014)
into equity capital.
However, the ratings are constrained by the high working capital
intensity of the company's operations on account of high levels of
inventory and receivable days, which has led to consistently high
utilization of working capital facilities. High reliance on
working capital borrowings coupled with regular debt funded capex
undertaken by the company has resulted in high gearing (2.38 times
as on 31st March 2013 though the same has declined from levels as
on 31st March 2012 on account of equity infusion), and moderate
debt coverage metrics. Further, the ratings also factor in the
sizeable debt repayments of the company in the near term; the
highly competitive and fragmented nature of the industry; and the
vulnerability of HDW's profitability to inventory price risk given
the high inventory levels maintained by the company.
Going forward, the company's ability to sustain the financial
performance of H1FY14 and manage its working capital requirements
against the anticipated revenue growth would be the key rating
sensitivities.
H. D. Wires Private Limited is a private limited company which was
incorporated in 1988 by Mr. Dilip Dev and the manufacturing
facility is situated in Sanwer Road Industrial Area, Indore. The
plant commenced operations from 1994. The company is engaged in
the manufacturing of low carbon steel wires, galvanized wires, M.
S. and G. I. welded mesh, barbed wire, rivets, roofing nails etc.
Currently the operations of the company are being looked after by
Mr. Dilip Dev and his sons Mr. Dheeraj Dev and Mr. Himanshu Dev.
HITECH EXTRUSION: ICRA Assigns 'B' Ratings to INR32.25cr Loans
--------------------------------------------------------------
The rating of '[ICRA]B' has been assigned to the INR9.75 crore
long-term fund-based facilities of Hitech Extrusion LLP. ICRA has
also assigned an '[ICRA]A4' rating to the INR7.50 crore (sublimit)
short-term non-fund based facilities of HEL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 2.25 [ICRA]B assigned
Cash Credit 7.50 [ICRA]B assigned
IBN Limit (7.50) [ICRA]B assigned
Channel Credit (7.50) [ICRA]B assigned
EPC/PCFC/FBP/FBN/ (7.50) [ICRA]B assigned
FCBC/FCBN
Buyers Credit/Letter (7.50) [ICRA]A4 assigned
of comfort/Foreign
Guarantee
Inland/ Foreign LC (7.50) [ICRA]A4 assigned
Exposure of forward (1.00) [ICRA]A4 assigned
contract
Bank Guarantee (3.00) [ICRA]A4 assigned
The assigned ratings are constrained by the relatively modest
scale of operations of the firm and its modest financial risk
profile marked by very high gearing, low profitability due to
intense competitive intensity, and weak coverage indicators. The
ratings further take into account the vulnerability of
profitability to fluctuations in raw material prices and exposure
to forex currency fluctuations, given that majority of raw
material requirement is met through import. ICRA also notes that,
the firm has limited bargaining power with the customers leading
to high receivables thereby resulting in high working capital
intensity.
The ratings, however favorably factor in the past experience of
the promoters in the brass metal industry and their long standing
relationships with raw material suppliers (brass scrap) on account
of dealing in the past through group concerns.
Established in 2010 as a limited liability partnership firm,
Hitech Extrusion LLP (HEL) is engaged in manufacturing and export
of brass & bronze extruded products like extrusion rods, wires,
casting, pipes, tubes, hollow rods, ingots, billets, brass
profiles, etc. The firm has an installed capacity of 3000 MTPA.
The firm is promoted by the Kataria & the Shah families who have
been associated with the brass industry for nearly three decades.
The firm's manufacturing facility is located at Jamnagar, Gujarat.
The firm is also a member of the Metal Recycling Association of
India (MRAI).
Recent Results
For FY 2011-12, the entity reported an operating income of
INR17.75 Cr. and profit after tax of INR0.01 Cr. Further, the firm
has reported an operating income of INR32.70 Cr. and profit after
tax of INR0.10 Cr. for FY 2013 (as provisional unaudited numbers).
INTERNATIONAL PUBLIC: CARE Rates INR6.4cr LT Bank Loans at 'B+'
---------------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of
International Public School Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 6.40 CARE B+ Assigned
Facilities
Rating Rationale
The rating assigned to the bank facilities of International Public
School Limited is primarily constrained on account of its short
operational track record and modest scale of operations, its
financial risk profile marked by leveraged capital structure, weak
debt coverage indicators and modest liquidity indicators. The
rating is further constrained due to the implementation risk
associated with the on-going debt funded expansion projects, its
dependence upon the efficient operations of the lessee (ie,
educational societies) as the lease income being the primary
source of income and competition within the education industry
from the existing as well as new schools.
The rating, however, derives strength from the vast experience of
the promoters and established operational track record of lessee
(ie, Shri Ram Nanda Educational & Welfare Society), location
advantage of having infrastructure at prominent places of Bhopal
and favourable outlook on the Indian education sector,
particularly the K-12 segment.
The timely completion of expansion project within the envisaged
cost and efficient operations of lessee coupled with timely
receipts of lease rentals would be the key rating sensitivities.
Bhopal-based (Madhya Pradesh) IPSL was incorporated in 2010 by Mr
Ashok Nanda and Mr Alok Nanda along with other relatives. The
company is engaged in creating and thereafter renting the
infrastructure, vehicles and other equipments to educational
institutions with specific focus on educational establishments
from pre-nursery level to higher secondary level (K-12) at Bhopal,
Madhya Pradesh.
The rent income is the prime source of revenue for IPSL. It has
created a school building and separate hostels for boys and girls
at its Misrod campus and has rented the same to one of its group
concern Shri Ram Nanda Educational & Welfare Society. IPSL has
entered into rent agreement with SREWS for the period of 30 years
ending on March 31, 2042 for leasing out of premises, ie, school &
hostel building and for leasing out of 26 school buses for a
period of three years starting from December 21, 2010 with an
option to renew it further.
IPSL is in the process of constructing new campuses which are
suitable for renting to K-12 model schools run by educational
societies. There are three campuses at Misrod, Bishenkhedi &
Govindpura all in Bhopal, which are rented out to SREWS, Neeraj
Mulchandani Educational Society (NMS) and Lok Sewa Sadan (LSS)
respectively; of these, latter two campuses are at the final
finishing stage as on September 30, 2013 and part of these campus
have been rented out from April 2013.
As per the audited results for FY13 (refers to the period April 1
to March 31), IPSL reported a total operating income of INR2.59
crore (FY12: INR0.70 crore) and net profit of INR0.05 crore (FY12:
INR0.01 crore).
JCBL LTD: CRISIL Upgrades Ratings on INR650MM Loans to 'B-'
-----------------------------------------------------------
CRISIL has upgraded its ratings on the bank loan facilities of
JCBL Ltd to 'CRISIL B-/Stable/CRISIL A4' from 'CRISIL D/CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 100 CRISIL A4 (Upgraded from
'CRISIL D')
Cash Credit 290 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Inland/Import
Letter of Credit 250 CRISIL A4 (Upgraded from
'CRISIL D')
Corporate Loan 150 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Rupee Term Loan 210 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
The rating upgrade is driven by JCBL's timely servicing of debt
obligations over the past three months, supported by interest-free
unsecured loans from group companies and a corporate loan of
INR100 million. JCBL refinanced its term loans with a corporate
loan. Hence, the company's liquidity improved in the near term; it
is likely to service its maturing debt with the impending
disbursement of INR50 million of the corporate loan. Although
weak, JCBL's liquidity could improve in the near term, supported
by an increase in cash accruals commensurate with growth in
operating revenues, and expected support from the promoters in the
form of unsecured loans. However, the company's liquidity is
constrained by its large working capital requirements and sizeable
debt obligations.
The ratings reflects JCBL's weak financial risk profile, marked by
high gearing and weak debt protection metrics, and exposure to
risks related to intense competition in the bus manufacturing
segment. These rating weaknesses are offset by JCBL's established
market position.
Outlook: Stable
CRISIL believes that JCBL will continue to benefit from its
established market position in the intensely competitive bus
manufacturing segment. The outlook may be revised to 'Positive' if
JCBL's liquidity improves substantially, because of an equity
infusion and an improvement in its working capital management,
and/or significant profitability and revenues, leading to sizeable
cash accruals. Conversely, the outlook may be revised to
'Negative' if JCBL's profitability/cash accruals are lower-than-
expected, and/or in the event of significant deterioration in
working capital requirements.
JCBL was incorporated in Chandigarh (Punjab) in 1989. The company
is promoted by Mr. Rajinder Aggarwal. It caters to the bus
building requirements of Swaraj Mazda Ltd. JCBL manufactures bus
bodies for luxury coaches and special vehicles such as ambulances,
mobile automated teller machines (ATMs), bullet-proof vans (for
politicians), political campaign vehicles, and hospitals-on-
wheels.
JCBL reported a loss after tax of INR16.1 million on net sales of
INR1.6 billion in 2012-13 (refers to financial year, April 1 to
March 31), and a profit after tax of INR8.2 million on net sales
of INR1.8 billion in 2011-12.
JUHI ALLOYS: CARE Reaffirms 'B+' Rating on INR33cr LT Bank Loans
----------------------------------------------------------------
CARE assigns the short-term ratings and reaffirms the long-term
ratings assigned to the bank facilities of Juhi Alloys Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 33 CARE B+ Reaffirmed
Facilities
Short-term Bank 2 CARE A4 Assigned
Facilities
Rating Rationale
The ratings are constrained by the elevated financial risk profile
characterized by low profitability margins, highly working capital
intensive operations, volatility in sales in the recent years and
the highly fragmented nature of the industry resulting in intense
competition and inherent cyclical nature of the steel industry.
The ratings also take into account the significant exposure of
Juhi Alloys Limited to its group companies.
However, the rating derives strength from the experienced
promoters and established track record in the steel industry and
established operations with regionally known brand name Rimjhim.
The ability of the company to consistently scale up the operations
with an improvement in the profitability margins and effective
working capital management remain the key rating sensitivities.
Incorporated on July 12, 1990, Juhi Alloys Ltd is a part of the
Kanpur-based Rimjhim group of companies managed by Mr Yogesh Kumar
Agarwal and family relatives. JAL is engaged in the
manufacturing and sale of a variety of thermo mechanically treated
(TMT) bars, SS Flats and rounds products along with dealing in
trading of billets, ingots, etc. The products of the company find
application mainly in construction activities. The company markets
its products through a mix of direct sales to builders and sales
through traders.
The manufacturing facilities of the company are located in the
Hamirpur district of Uttar Pradesh (UP) with an installed capacity
of 90,000 MTPA per annum as on March 31, 2013.
JAL reported a PAT of INR0.54 crore on a total income of INR133.23
crore for FY13 (refers to the period April 1 to
March 31) as compared with PAT of INR0.87 crore on a total income
of INR167.46 crore for FY12.
KAMMAN CORP: ICRA Cuts Rating on INR13cr LT Loans to 'BB+'
----------------------------------------------------------
The long term rating for the INR13.00 crore fund based bank
facilities (enhanced from INR8.00 crore) of Kamman Corporation has
been revised from '[ICRA]BBB-' to '[ICRA]BB+' and the short term
rating for the sub limits of INR6.00 crore has been revised from
'[ICRA]A3' to '[ICRA]A4+'. The outlook assigned to the long term
rating is "Stable". ICRA has also revised the ratings for the
INR2.00 crore (earlier INR7.00 crore) proposed limits from
[ICRA]BBB- and [ICRA]A3 to [ICRA]BB+ and [ICRA]A4+.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
LT Fund Based 13.00 [ICRA]BB+(Stable) downgraded
Limits (CC)
ST Non Fund- (6.00) [ICRA]A4+ downgraded
based Limits
(LC)
Proposed Limits 2.00 [ICRA]BB+(Stable)/[ICRA]A4+
downgraded
The total limit utilization should not exceed INR15.00 crore.
The ratings revision takes into account Kamman Corporation's
weakening financial position on account of sluggish demand
conditions as evident in the dip in revenues due to sluggish
demand conditions and declining profitability, deteriorating
capital structure following increasing levels of borrowings and
weak debt protection metrics. The ratings also take into account
the susceptibility of the margins to fluctuations in raw material
prices given the high levels of inventory held up. ICRA also notes
the vulnerability to regulatory risks and to the high level of
competition prevailing in the industry. The ratings also
incorporate the risk of capital withdrawals, given its
constitution as a partnership firm.
The ratings nevertheless continue to factor in the rich experience
of the promoters' in trading and processing of minerals and ferro
alloys, long standing association with reputed players in welding
industry and also the operational backing received from its group
concern.
Kamman Corporation (KC) was incorporated in 1978 as a partnership
firm. It is engaged in the trading and processing of minerals and
ferro alloys and is an ISO 9001:2000 certified entity. The company
has its registered office at Vikhroli, Mumbai, a sales office at
Chennai and a processing unit at Mankoli (Maharashtra).
KC is a part of the Kamman Group, which has two other group
concerns named 'Premier Developers', which is in the business of
construction and 'Premier Industrial Corporation Limited' (rated
as [ICRA]BBB-/[ICRA]A3 by ICRA in November 2013), engaged in the
manufacturing and processing of ferro and metal alloys such as
ferromanganese, ferrochrome and ferrosilicon and nickel wires.
Recent Results:
During 2011-12 the firm reported a net profit of INR1.6 crore on
an operating income of INR52.6 crore. As per the provisional
financials for 2012-13, the company reported a profit after tax
(PAT) of INR0.7 crore over an operating income of INR50.5 crore.
KANTILAL CHHAGANLAL: ICRA Cuts Rating on INR0.5cr Loan to 'BB'
--------------------------------------------------------------
The rating for INR27.5 crore short term non-fund based bank lines
of Kantilal Chhaganlal Securities Private Limited has been
downgraded to '[ICRA]A4' from '[ICRA]A4+' and the rating for
INR0.50 crore long term fund based bank lines has been downgraded
to '[ICRA]BB' from '[ICRA]BB+'. The outlook on the long term
rating remains stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Short Term Non 27.5 [ICRA]A4 downgraded from
Fund Based Bank [ICRA]A4+
Lines
Long Term Fund 0.50 [ICRA]BB/Stable Outlook
Based Bank Lines downgraded from
[ICRA]BB+/Stable Outlook
The rating downgrades factors in KCSPL's continuous losses for the
past four years, high operating cost, relatively small and
declining market share in retail broking business, sharp erosion
of client base, low diversification of revenue profile and its
dependence on capital market business which is prone to market
volatility. While the outlook on the broking industry remains weak
in the near term, the ratings however take into account the
continued support from shareholders in terms of capital infusion
and management support. The ratings at current level also reflect
KCSPL's relative positioning vis-…-vis other ICRA rated brokerage
houses. Going forward, KCSPL's rating would be sensitive to its
ability to arrest losses in its business and its ability to raise
funds as and when required from its shareholders to support the
business operations.
Incorporated in 1954 by first generation entrepreneurs, KCSPL
started its capital market related business operations on retail
equity broking which continues to be the group's major revenue
contributor. While KCSPL remains a smaller player, its market
presence has been under pressure as reflected in its equity market
share which has declined sharply to 0.02% in FY 13 from 0.05% in
FY 14. Also, KCSPL's branch network and franchisee strength has
declined sharply to 6 branches and 550 franchisees as at June 30,
2013 from 10 branches and 785 franchisees as at March 31, 2013 as
the company's outlet strength erodes in the face of competitive
pressures from larger players wanting to step up their market
presence.
The total broking turnover of the company declined by 48% from
16846 crores in FY12 to 8794 crores in FY13. The turnover in the
retail segment declined by 50% on a YoY basis to INR8206 crore,
the turnover in the institutional segment increased by 20% to
INR588 crore in FY13. The overall yields for the company rose from
2.66 bps to 3.59 bps with increase in the cash volumes from 27% in
FY12 to 41% in FY13.
From a financial perspective, the company has been making losses
since the last 4 years. In FY 13, with revenues continuing to
remain under pressure as retail participation in equity markets
continued to decline, operating losses remained at the same level
of ~Rs 6.5 crore. However, the quantum of losses increased
substantially to INR27.6 crore from INR2.4 crore in FY 12 as the
company provided for bad debts to the tune of INR15 crore and also
wrote down the value of its investments by INR5 crore. The company
has taken various cost cutting measures such as shifting of rental
premises, reduction in IT costs and revision of salaries for the
same. However with the capital infusion in the form of
compulsorily convertible preference shares by the promoter
companies, the net worth of the company saw a decline only to the
tune of INR5 crore to INR22 crore as at March 31, 2013 from INR27
crore as at March 31, 2012 Going forward, the company wishes to
reduce focus on retail broking and make inroads into institutional
broking. For YTD FY14, 25-30% of the total revenue comes from
Institutional Business, with LIC being the main client along with
two FII clients. The Company is also looking at re-activating old
clients in the institutional broking space.
KARLO AUTOMOBILES: ICRA Assigns 'B+' Rating to INR10cr Loan
-----------------------------------------------------------
ICRA has assigned '[ICRA]B+' rating to the INR10.00 crore fund
based bank limits of Karlo Automobiles Pvt. Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 10.00 [ICRA]B+ assigned
The rating takes into consideration the decline in sales volume in
the last two years on account of increased competition and weak
demand scenario. The rating also considers the low operating
profitability of the company, given the nature of the business,
wherein pricing policies are determined by Maruti Suzuki India
Limited (MSIL). Due to the low profitability in the business, the
interest coverage of the company remains low. Further, high
reliance on external debt to meet the increasing working
capital requirements have led to an adverse gearing of 3.56 times
as on March 31, 2013.
The rating also factors in the limited geographical presence of
the company, which is operating out of two showrooms in the State
of Bihar. The rating however, favourably factors in the experience
of the promoters in the auto dealership business with an
established track record of operations for more than a decade.
KAPL is an authorized dealer for MSIL - which is the market leader
in the passenger car segment in India. ICRA notes the present
challenging demand conditions for the domestic auto industry,
which are likely to limit the near term revenue growth for the
company.
KAPL was incorporated in 1997 and has been engaged in the business
of vehicle dealership for Maruti Suzuki India Limited (MSIL). The
directors of company are Mr Shivesh Narayan and Mr Sanjeev
Kumar. The promoters have two other dealerships for two wheelers,
one for Honda Motorcycle and Scooter India and one for Hero
Motocorp Limited.
Recent Results
The company has reported a profit after tax (PAT) of INR0.03 crore
in FY13 on an operating income (OI) of INR71.26 crore as against a
PAT of INR0.35 crore in FY12 on an operating income of INR80.68.
KINGFISHER AIRLINES: Mallya's Investment Unit Cuts Shareholding
---------------------------------------------------------------
The Financial Express reports that Vijay Mallya's investment arm,
Kingfisher Finvest India, has further reduced its shareholding in
the debt-ridden Kingfisher Airlines through an off-market
transaction of 16 million shares, according to a filing with the
stock exchanges.
FE relates that the investment arm, which held a 7.21% stake, had
sold 40 million shares, or 4.94% stake, last month in an off-
market transaction with UB International Trading for R23 crore.
While the filing did not specify the acquirer in this latest
transaction, it said that Kingfisher Finvest's total stake in the
airline is now 0.29%, or 2.32 million shares. The transaction on
November 6 was worth INR9.10 crore, it said, the report relays.
UB International Trading is an entity within the UB Group that
exports products including beverage alcohol, processed foods and
leather footwear. In the quarter ending September, the promoter
stake in Kingfisher Airlines was 32.12% out of which the group's
holding company United Breweries Holdings (UBHL) held 21.36% and
Kingfisher Finvest held 7.21%. The remaining shareholding was held
by Vijay Mallya and UB Overseas, FE discloses.
Headquartered in Mumbai, India, Kingfisher Airlines --
http://www.flykingfisher.com/-- formerly known as Deccan
Aviation Ltd., served about 35 domestic destinations with a fleet
of more than 40 aircraft, including Airbus jets and ATR 72
turboprops. It maintained bases in major cities such as Delhi and
Mumbai.
Kingfisher Airlines, which has been unprofitable since it was
created in 2005, accumulated losses of $1.9 billion between
May 2005 and June 30, 2012, The Wall Street Journal reported
citing Sydney-based consultant CAPA-Centre for Aviation. The
airline also owes about $2.5 billion to lenders, suppliers,
leasing companies and investors, the Journal added.
According to The Times of India, the company began showing signs
of weakness in November 2011 when it ran out of money to operate
most of its flights and started reducing its flights to cut cost.
The airline also failed to pay salaries to its employees for a
long time following which the employees went on an indefinite
strike. Its flying license was finally suspended in October 2012,
TOI reported.
LALCHAND BUILDERS: CARE Rates INR13.36cr LT Bank Loans at 'B+'
--------------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Lalchand
Builders Pvt Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 13.36 CARE B+ Assigned
Facilities
Rating Rationale
The rating assigned to the bank facilities of Lalchand Builders
Pvt Ltd is primarily constrained by the promoter's lack of
experience in real estate business, execution risk as the project
is in the initial stage of implementation, marketing risk as lease
agreement with the tenants is yet to be tied up and intense
competition in the vicinity of the proposed shopping mall.
The aforesaid constraints are partially offset by the experience
of the promoters in the retail and hotel business, long track
record of the group and favourable location of the proposed
shopping mall.
The ability of the company to complete the project without any
cost or time over run and successful tie up for the lease rental
agreements would be the key rating sensitivities.
Lalchand Builders Pvt Ltd, incorporated in December 1996 by Mr
Sunjoy Hans and his family members based out of Bhubaneswar,
Odisha, for the purpose of carrying on activities related to real
estate. The company, after remaining dormant till March 2013,
started a project to develop a mid-scale shopping mall at Vani
Vihar, Bhubaneswar (Odisha).
The proposed project shall be spread over 0.5 acre of land and
shall comprise of G+3 building. The estimated cost of the project
is INR23.82 crore (excluding cost of land) which is proposed to be
financed by way of equity of INR10.46 crore and debt of INR13.36
crore (at a debt equity mix of 1.28:1). Financial closure for the
debt has been achieved. The contract for construction has been
awarded to Sidharth Construction and Trading Pvt Ltd (engaged in
civil construction and infrastructure development). The total
leasable area of the project is 45,900 square feet (lsf). As on
September 30, 2013, LBPL had incurred INR8.33 crore for the
construction of the shopping mall. The project is scheduled to be
completed by the end of September 2014. The project is in the
initial stage of implementation and the company has received all
land and other clearances for these projects.
LAXMI DIAMOND: ICRA Withdraws 'B+' Rating on INR11cr Loans
----------------------------------------------------------
ICRA has withdrawn the '[ICRA]B+' rating assigned to the INR11.0
crore, term loans and '[ICRA]A4' rating assigned to INR492.0 Crore
working capital facilities of Laxmi Diamond Private Limited, as
the notice period of three years since suspension of rating has
expired.
MAIHAR ALLOYS: CARE Rates INR9cr LT Bank Loans at 'B'
-----------------------------------------------------
CARE assigns 'CARE B' rating to the bank facilities of Maihar
Alloys Pvt Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 9 CARE B Assigned
Facilities
Rating Rationale
The rating assigned to the bank facilities of Maihar Alloys Pvt
Ltd is constrained by its small scale of operations and weak
financial risk profile marked by thin profitability margins,
leveraged capital structure and weak debt service coverage
indicators. The rating is further constrained by the lack of
backward integration vis-a-vis volatile prices of raw material and
finished goods, low capacity utilization, high working capital
intensity and its presence in the highly competitive and
fragmented iron & steel industry.
The rating, however, favorably takes into account the long-
standing experience of the promoters in the iron & steel industry
and strategic location of the plant.
The ability of the company to grow its operations and
profitability along with future performance of the iron and steel
industry will remain the key rating sensitivities.
Maihar Alloys Pvt Ltd, incorporated in May 2004, by two brothers,
Mr Dhananjay Kumar and Mr Pawanjay Kumar, is engaged in the
manufacturing of Mild steel (MS) ingots. The manufacturing
facility of the company is located at Rauta in Ramgarh, Jharkhand.
The unit commenced commercial production in April 2005 with an
installed capacity of 38,000 MTPA. The facility has quality system
certification of ISO:9001:2008.
During FY13 (refers to the period April 01 to March 31), MAPL
reported a total operating income of INR59.5 crore and PAT of
INR0.1 crore.
MEGHA BOTTLING: ICRA Raises Ratings on INR15.21cr Loans to 'BB+'
----------------------------------------------------------------
ICRA has revised the long term rating of Megha Bottling for its
INR14.00 crore fund based limits and INR1.21 crore non fund based
limits from '[ICRA]BB' to '[ICRA]BB+'. The outlook on the
assigned rating is stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit 14.00 [ICRA]BB+(stable)/revised
from BB(stable)
Non Fund Based Limit 1.21 [ICRA]BB+(stable)/revised
from BB(stable)
The revision in rating takes into account the increased scale of
operations as reflected by healthy revenue growth of ~48%
witnessed by the firm during FY13 (revenue of INR75.91 crore) over
the preceding fiscal FY12 (revenue of INR51.31 crore) supported by
increased brand visibility and expansion of distribution network
in new districts in Karnataka (Mysore, Bellary), Kerala (Calicut),
and Tamil Nadu (Krishnagiri). The rating is also supported by
improvement in capital structure as reflected by gearing of 1.06X
as on 31st March 2013 against 1.34X as on 31st March 2012.
Besides, the rating continues to draw comfort from the fact that
the promoter group possesses more than ten years of experience in
the packaged beverage industry. The management has over the years
built and leveraged its distribution network by diversifying into
complimentary business segments such as packaged foods, packaged
drinking water and fruit juices.
The rating is however constrained on account of persistent decline
in operating margins of the firm (FY13-OPM of 7.05% against 10.67%
in FY12 and 17.71% in FY11) which were impacted due to increase in
raw material cost; the entity also incurred significant marketing
expenses (Rs.1.31 crore for FY13) to enable brand building which
further resulted in moderation of margins. ICRA notes that MB
operates in an intensely competitive industry dominated by
established global and national players like Pepsi-co (Pepsi,
Tropicana), Coca Cola (Coke) and Dabur (Real) which strains the
margins and restricts the manufacturer's ability to pass on price
increases. These apart, the inherent risks associated with a
partnership firm such as limited ability to raise equity capital,
risk of capital withdrawal etc are also probable threats.
Going forward, MB's ability to increase its market share, maintain
its growth trajectory and revive its operating margin while
maintaining its moderately leveraged capital structure will be the
key rating sensitive factors.
Megha Bottling was incorporated in 2002 by Smt. Ranjitha Shankar
as a proprietorship under the Shankar Group of Companies (SG) with
the objective of manufacturing aerated soft drinks and fruit
juices marketed under the brand Bindu. In FY14, Megha Bottling has
been converted into partnership firm with the inclusion of Sri. K.
Sathya Shankar (Husband of Smt. Ranjitha Shankar) into the entity.
The firm manufactures soft drinks such as Jeera Masala, Zivo
Soda,Club Soda, Orange, Lemon, Cola, Ginger and Apple Fizzy. The
Group has its manufacturing unit in Karnataka (Puttur) and
warehouses in Karnataka (Puttur, Bangalore, Hubli, Gulbarga),
Maharashtra (Pune), Tamil Nadu (Chittoor),and Kerala (Kasargod)
with a total storage capacity of 278,500 cases and the strong
distribution network spread across Karnataka, Tamil Nadu, Kerala,
Andhra Pradesh, Goa, Orissa and Southern Maharashtra.
The Shankar Group of Companies (SG) was formed in 2000 by Mr.
Sathya Shankar K. with the incorporation of Megha Springs Private
Limited for the purpose of marketing packaged drinking water in
South India. In 2005, Megha Fruit Processing Private Limited
(rated at [ICRA] BB/A4) was incorporated to manufacture fruit
juices in apple and mango flavours. In 2008, Mahima Shankar
Processed Foods (MSPF) (rated at [ICRA] B+) was set up with the
aim of manufacturing processed foods such as potato chips,
extruded snacks, namkeens, masala powder and branded oil. The
group has two marketing arms Megha Marketing (rated at [ICRA] BB)
and Mahima Traders that undertake the marketing activities of all
the group companies. The consolidated revenue for the group for
FY13 was ~INR250 crore.
MILLENNIUM STARCH: CARE Rates INR23.76cr LT Bank Loans at 'B'
-------------------------------------------------------------
CARE assigns 'CARE B' rating to the bank facilities of Millennium
Starch India Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 23.76 CARE B Assigned
Facilities
Rating Rationale
The rating assigned to the bank facilities of Millennium Starch
India Private Limited is constrained by its nascent stage of
operation, exposure of VSPL to volatility in the raw material
prices and seasonal availability of maize resulting in the working
capital intensive nature of operations. The rating, however, is
underpinned by the experience of the promoters in running various
businesses and application of maize starch and derivates across
various sectors.
The ability of the company to achieve the envisaged scale of
operations, diversify its revenue segment and manage its working
capital requirement efficiently is the key rating sensitivity.
Incorporated in the year 2008, Millennium Starch India Private
Limited is a starch manufacturer based out of Sangli in
Maharashtra. MSPL manufactures starch from maize at its
factory located in Belgaum district, Karnataka. The company has a
production capacity of 52,880 metric tonnes per annum (MTPA) of
maize starch. Maize starch and its derivatives have applications
across multiple sectors like food, paper & adhesives,
pharmaceuticals, textile, cattle & poultry feed etc, providing a
diversified customer base. The promoters of the company are
involved in various businesses through proprietorship firms.
MODEL PUBLIC: ICRA Rates INR7.5cr Bank Loans at 'BB'
----------------------------------------------------
ICRA has assigned the long term rating of '[ICRA]BB' to INR7.50
crore proposed bank facilities of Model Public School Society.
The outlook on the long term rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Proposed bank 7.50 [ICRA]BB(Stable) assigned
Facilities
The assigned derives strength from the established presence of
Bhiwadi branch of the Modern Public School operating under the
MPSS, which has been witnessing healthy enrolments and provides a
stable source of fee based income for the society. Aided by
increasing enrolments at the Bhiwadi School, MPS society has been
generating adequate cash accruals to fund its capital expenditure
requirements, which in turn has helped it maintain strong credit
metrics with no reliance on external financing.
Though the society (through its two institutes) caters to over
3500 students, the scale of operations is however modest, with
revenue receipts of INR14.33 crore in FY2013. Further, while the
enrolments remain healthy in the Bhiwadi School, the society has
been witnessing only modest enrolments and cash losses in its
Noida School. With significant capital expenditure planned over
the next three years for the construction of a primary school, the
majority of which is proposed to be funded through the society's
internal accruals; ramping up of existing as well proposed
operations remains critical to ensure adequacy and timely
generation of accruals for funding capital expenditure as well as
debt servicing. The rating also remains constrained by the
execution risk associated with the above project since
construction is yet to commence.
ICRA's rating action also takes note of the recent advances as
well as proposed purchases by MPSS for the land purchase to
undertake further expansions. Since some of these transactions
have been with related parties, ability to execute them at arm's
length consideration and scale of further capital expenditure and
its funding pattern thereof will continue to be crucial for the
credit profile of MPSS and hence would be key rating monitorables.
This apart, the ability of the society to execute the proposed
capital expenditure as envisaged as well as to achieve optimum
operating metrics post commencement of operations, and improve the
occupancy levels at its Noida School, will be critical for its
cash accruals and will remain key rating sensitivities.
Incorporated in 1986 by Mr. Satish Kaura (CMD of Samtel group),
Model Public School Society (MPSS) currently operates two schools
in Bhiwadi (Rajasthan) and Noida (Uttar Pradesh). MPS-Bhiwadi,
which is spread across a land parcel of 15 acres, was established
in 1986 and caters to students till Standard XII. MPS-Noida, which
became operational in 2011, is located on a land parcel of 5 acres
in a housing project 'Crossings Republik' and caters to students
till Standard X. The two schools collectively caters to 3,794
students (AY 2013-14).
The current operations of the MPS society are looked after by Mr.
Satish Kaura's daughter, i.e. Mrs. Swati Munjal
Recent Results
The society reported a net surplus of INR3.94 crore on revenue
receipts of INR14.33 crore in FY2013 as against a net surplus of
INR2.56 crore on revenue receipts of INR10.85 crore in FY2012.
MULTIURBAN INFRA: ICRA Suspends 'B' Ratings on INR11.3cr Loans
--------------------------------------------------------------
ICRA has suspended the '[ICRA]B' rating assigned to the INR11.30
crore bank facilities of Multiurban Infra Services Private
Limited. The suspension follows ICRA's inability to carry out a
rating surveillance in the absence of the requisite information
from the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 6.50 [ICRA]B suspended
Non -Fund Based 4.80 [ICRA]B suspended
Limits
According to its suspension policy, ICRA may suspend any rating
outstanding if in its opinion there is insufficient information to
assess such rating during the surveillance exercise.
NAVUTHAN EDUCATIONAL: CARE Rates INR40.30cr LT Loans at 'B'
-----------------------------------------------------------
CARE assigns 'CARE B' ratings to the bank facilities of Navuthan
Educational Trust.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 40.30 CARE B Assigned
Facilities
Rating Rationale
The rating assigned to the bank facilities of Navuthan Educational
Trust is constrained by eroded net-worth of NET due to the
accumulated deficit, high competition faced from the numerous
educational institutes operating in the vicinity and strict
regulatory norms in the industry. The rating, however, derives
strength from experienced and qualified trust members in
the education sector, growth in total operating income during
FY10-FY12 (refers to the period April 1 to March 31) due to the
increase in the number of students and positive outlook and high
growth potential for the sector.
The ability of NET to scale up its operations by attracting more
number of students and to generate surplus and improve its capital
structure will remain the key rating sensitivities.
Navuthan Educational Trust was formed in the year 2008 by Mr
Prashant Bhalla, Mr Amit Bhalla, Mr Rajinder Kumar Bansal and Mr
Sunny Bansal. The trust is registered as a public charitable trust
with the purpose of promoting pre-primary to higher secondary
education. NET has established a school under the name of Manav
Rachna International School (MRIS) located at Gurgaon, Delhi
spread across five acres of land (owned by the trust). MRIS has
received all the necessary approvals and is managed by Mr Dhriti
Malhotra, principal of the school under the leadership of the
trust members. MRIS has 107 teaching staff and 27 non- teaching
staff with a student strength of 2234 students for the academic
year (AY) 2012-2013.
During FY13, NET reported a total operating income of INR19.28
crore and a deficit of INR0.30crore as against a total operating
income of INR16.53 crore and deficit of INR1.08 crore in FY12.
NS PAPERS: ICRA Suspends 'B+' Rating on INR34.15cr Loans
--------------------------------------------------------
ICRA has suspended '[ICRA]B+' rating assigned to the INR34.15
crores long term fund based limits of NS Papers Limited (erstwhile
Rana Papers Limited). ICRA has also suspended '[ICRA]A4' rating
assigned to the INR9.10 crores short term fund based limits of NS
Papers Limited (erstwhile Rana Papers Limited). The suspension
follows ICRA's inability to carry out a rating surveillance in the
absence of the requisite information from the company.
According to its suspension policy, ICRA may suspend any rating
outstanding if in its opinion there is insufficient information to
assess such rating during the surveillance exercise.
PARTH PLASTPACK: ICRA Assigns 'B+' Ratings to INR6.6cr Loans
------------------------------------------------------------
The rating of '[ICRA]B+' has been assigned to the INR6.60 crore
long-term fund-based facilities and term loans of Parth Plastpack
Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loans 4.60 [ICRA]B+ assigned
Fund-based, Long-
term facilities 2.00 [ICRA]B+ assigned
The rating factors in the highly competitive industry structure
with low entry barriers and limited product differentiation and
the weak financial risk profile characterised by high gearing and
weak debt coverage indicators. Moreover, the company has a limited
track record of operations, with the company having commenced
production from Sept'12. The ratings, however, favourably factor
in the established relationships of the promoters with the
distributors and customers in the industry through earlier
ventures and the favourable demand outlook for leno bags in the
packaging of fruits and vegetables due to price competitiveness
and advantages in storage and transportation vis-a-vis jute sacks.
The ability of the company to achieve satisfactory sales volumes
and maintain reasonable profitability and liquidity position will
be the key rating sensitivities going forward.
Parth Plast Pack Private Limited (PPPL) was incorporated in 2011.
The company and its manufacturing facility is a combined project
of two families-the Mittal family and the Bagdi family. The two
families have been in partnership for more than two decades
through a partnership firm by the name of M/s Jute India
Corporation which was engaged in the trading of jute sacks for
agricultural produce. However with the shift in usage from jute
sacks to leno bags the promoters first started a partnership firm
by the name of Parth Packaging for trading and manufacture of leno
bags on trial basis. Based on the success of this venture the
promoters decided to set up PPPL. Under PPPL the promoters set up
a manufacturing facility of 1710 MTPA capacity near Indore in the
state of Madhya Pradesh. The manufacturing facility of the company
commenced production in September 2012.
Recent Results
As per unaudited and provisional results for H1 FY14 the company
reported a net profit of INR0.15 crore on net sales of INR4.90
crore as against a net profit of INR0.09 crore on net sales of
INR4.78 crore in FY13.
PRIME INDUSTRIES: CARE Raises Rating on INR7.01cr Loans to 'B+'
---------------------------------------------------------------
CARE revises the ratings assigned to the bank facilities of
Prime Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 7.01 CARE B+ Revised from
Facilities CARE C
Short-term Bank 1.50 CARE A4 Reaffirmed
Facilities
The ratings assigned by CARE are based on the capital deployed by
the partners and the financial strength of the firm at present.
The ratings may undergo change in the case of withdrawal of the
capital or the unsecured loans brought in by the partners in
addition to the financial performance and other relevant factors.
Rating Rationale
The revision in the long-term rating of Prime Industries (Prime)
factors in the growth in the total operating income coupled with
improvement in profitability margins, infusion of capital by the
partners resulting in an improvement in the capital structure. The
ratings continue to remain constrained by the leveraged capital
structure, weak liquidity ratios, presence in the competitive and
fragmented woven sacks industry, raw material price volatility and
its constitution as a partnership firm.
The ratings continue to draw comfort from the experience of the
promoters with demonstrated funding support and its comfortable
operating cycle. Going forward, the ability to increase the scale
of operations while maintaining its profitability margins in a
competitive market and improvement in capital structure would be
the key rating sensitivities.
Mumbai-based Prime is a partnership firm formed in 2006 by Mr
Gaurav Jain, Mr Virendra Jain, Mr Vaibhav Jain and PET Fibres Ltd
as its partners. As per the partnership deed, profits and
losses of the firm shall be shared only between PFL and Mr Vaibhav
Jain in the ratio of 2:1 and the remaining partners are not
entitled to share in the profits or losses of the firm. Prime has
its plant located at Sidcul, Uttarakhand with an installed
capacity of 9,600 metric ton per annum (MTPA) as on March 31,
2013. Prime is engaged in the manufacturing of High Density
Polyethylene (HDPE) bags and woven sacks.
Prime reported a PAT of INR1.56 crore on a total income of
INR78.49 crore in FY13 (refers to the period April 1 to March 31)
as against a net loss of INR0.18 crore on a total income of
INR61.37 crore in FY12.
PRIYADARSHI PURNNADA: 'BB-' Rating on INR10.37cr Loan Reaffirmed
----------------------------------------------------------------
CARE reaffirms the rating assigned to the long-term rating and
withdraws the short-term rating of the bank facilities of
Priyadarshi Purnnada Automobile Pvt Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 10.37 CARE BB- Reaffirmed
Facilities
Short-term Bank -- Withdrawn
Facilities
Rating Rationale
The ratings assigned to the bank facilities of Priyadarshi
Purnanda Automobile Pvt Ltd continues to remain constrained by the
pricing and margin pressure arising out of competition from
various auto dealers in the market, its linkages to the fortunes
of Ford India Pvt Ltd, working capital intensive nature of its
business leading to higher borrowings and cyclical nature of the
auto industry with extant economic scenario and uncertainty in the
auto industry.
The aforesaid constraints are partially offset by the rich
experience of the promoters, sole authorized dealership status of
Ford passenger cars in Bihar resulting in low competition,
nonexistence of contract renewal risk and the integrated nature of
business.
Going forward, PPAPL's ability to increase its scale of operations
and profitability margins, effectively manage its working-capital
requirements and performance of Ford passenger cars in the
domestic market would be the key rating sensitivities.
Priyadarshi Purananda Automobile Pvt Ltd was promoted in the year
2007 by Mr Manish Priyadarshi and Ms Manju Sinha. Currently, it is
the only authorized dealer of Ford India Pvt Ltd for its passenger
cars, spares & accessories for Bihar. PPAPL has a Ford passenger
car showroom (on rental basis), covering an area of about 6,000 sq
ft in Patna, wherein it also provides repair and refurbishment
services for Ford cars. This part, it has a warehouse (self-owned)
in close proximity to the showroom, having a capacity to store
around 20-25 passenger cars. At present, PPAPL's product portfolio
consists of popular Ford cars like 'Endeavour', 'Fiesta', 'Figo',
'Eco Sport' and 'Classic' in different models and colours. The
company follows an order-based policy for high priced Ford cars
(like 'Endeavour') keeping the region and target market in mind.
PPAPL receives a small portion of its revenue from finance and
insurance companies in the form of commission for bundled
marketing of their products.
During FY13 (refers to the period April 1 to March 31), the
company reported a total operating income of INR25 crore (FY12:
INR35.3 crore) and a PAT of INR0.2 crore (FY12: INR0.3 crore). As
maintained by the management, the company has reported a total
operating income of INR7.97 crore during H1FY14.
PROLIFIC PAPERS: ICRA Suspends 'B' Rating to INR35cr Loans
----------------------------------------------------------
ICRA has suspended '[ICRA]B' rating assigned to the INR35.0 crore
term loans and fund based working capital facility of Prolific
Papers Private Limited. The suspension follows ICRA's inability to
carry out a rating surveillance in the absence cooperation from
the company.
According to its suspension policy, ICRA may suspend any rating
outstanding if in its opinion there is insufficient information to
assess such rating during the surveillance exercise.
QUALITY WOVEN: ICRA Assigns 'BB' Ratings to INR16.38cr Loans
------------------------------------------------------------
The rating of '[ICRA]BB' has been assigned to the INR12 crore
long-term, fund-based facilities and the INR4.38 crore term loans
of Quality Woven Sacks Private Limited. The outlook on the long-
term rating is Stable. The rating of '[ICRA]A4' has been assigned
to the INR1.40 crore short term non-fund based facilities of
QWSPL. The ratings of [ICRA]BB (Stable) and [ICRA]A4 have also
been assigned to the INR7.07 crore unallocated limits of QWSPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-Term Fund- 12.00 [ICRA]BB (Stable) assigned
based Limits
Term Loans 4.38 [ICRA]BB (Stable) assigned
Letter of Credit 1.00 [ICRA]A4 assigned
Bank Guarantee 0.40 [ICRA]A4 assigned
Unallocated Limits 7.07 [ICRA]BB (Stable)/[ICRA]A4
assigned
The ratings are constrained by the highly competitive nature of
the industry with low entry barriers and limited product
differentiation and vulnerability of profitability to fluctuations
in polymer prices. The ratings also factor in the company's
customer and sector concentration risks and low bargaining power
with the customers and suppliers. The financial profile is
characterised by modest return indicators, high gearing levels and
modest debt coverage indicators. Further, the liquidity position
of the company is weak as reflected by high utilisation of working
capital limits. The ratings, however, favourably factor in the
established track record of the promoters in the HDPE/PP woven
sacks industry, the favourable long-term demand prospects from the
cement industry and the company's established customer base in
Madhya Pradesh. The company is a part of the Ganga Group, with
other group entities also engaged in polywoven sacks manufacturing
leading to synergies in procurement of raw materials. Further, the
company has fiscal benefits from the MP government, which leads to
healthy profitability vis-a-vis other industry players. Going
forward, the ability of the company to sustain its revenues and
profitability and manage its liquidity position will be key rating
sensitivities.
Quality Woven Sacks Private Limited was incorporated in Rewa (MP)
in 2007 by the Ganga Group, primarily to cater the needs of Maihar
Cements' Satna (MP) plant. The company manufactures polypropylene
(PP) bags for the MP-based cement industry. QWSPL has a
manufacturing capacity of 8000 metric tonnes per annum (MTPA).
Ganga Group is a collaboration of the Chaudhary and Tulsyan
families. The group is engaged in various businesses: polywoven
sacks through the entities QWSPL, Ganga Bag Udyog Private Limited,
Neel Kamal Polytex Industries Private Limited and RAS Polytex
Private Limited; paper through the entities Ganga Papers India
Limited and Ganga Pulp & Papers Private Limited; and sponge iron
and billet manufacturing through Shanti Gopal Concast Limited.
In 2012-13, QWSPL reported a net profit of INR0.37 crore on an
operating income of INR62.81 crore against net profit of INR0.32
crore on an operating income of INR55.49 crore in 2011-12.
RAJU SPINNING: ICRA Cuts Ratings on INR57.83cr Loans to 'D'
-----------------------------------------------------------
ICRA has revised the long-term rating outstanding on the INR30.57
crore term loan facilities, INR22.00 crore fund based facilities
and INR0.26 crore long-term non-fund based facilities of Raju
Spinning Mills Private Limited to '[ICRA]D' from '[ICRA]B+'. ICRA
has also revised the short term rating outstanding on the INR5.00
crore short-term non-fund based facilities of the Company to
'[ICRA]D' from '[ICRA]A4'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
LT-Term loan 30.57 [ICRA]D; downgraded
facilities from [ICRA]B+
LT-Fund based 22.00 [ICRA]D; downgraded
Facilities from [ICRA]B+
LT-Non-fund based 0.26 [ICRA]D; downgraded
Facilities from [ICRA]B+
ST-Non-fund based 5.00 [ICRA]D; downgraded
Facilities from [ICRA]A4
The revision in the ratings considers the recent delays witnessed
in debt servicing by the Company on account of stretched cash
flows and weak liquidity. Despite the improvements in operating
profits in the wake of favourable cotton yarn demand in the last
one year, the company's liquidity position has been impacted by
the high interest and principal repayment obligations on the term
loans taken to support the past capital expenditure, especially on
the spend of ~Rs. 12.0 crore in 2010-11. Going forward,
improvement in sales and profits will be critical to improve the
accruals and meet the timely debt repayment obligations.
Raju Spinning Mills Private Ltd (RSMPL) was incorporated in 1983
and is primarily engaged in production of cotton yarn with its
spinning unit located at Rajapalayam, Tamil Nadu. The company is
closely held by the promoters and the promoters' family. The
Company commenced operations in the year 1984 with a capacity of
4,000 spindles. In a phased manner, the company has expanded its
capacity to current levels of 59,932 spindles. The company's
product profile is skewed towards the finer counts of carded and
combed yarn, with counts largely ranging from 60s to 100s. The
company also produces customized yarns as per the requirements of
the customers.
Recent Results
For the financial year 2012-13 the Company reported a net profit
of INR0.3 crore on an operating income of INR76.5 crore as against
a net loss of INR5.9 crore on an operating income of INR51.7 crore
during the financial year 2011-12.
RAS POLYTEX: ICRA Assigns 'BB' Ratings to INR10.77cr Loans
----------------------------------------------------------
The rating of '[ICRA]BB' has been assigned to the INR6.5 crore
long-term, fund-based facilities and the INR4.27 crore term loans
of RAS Polytex Private Limited. The outlook on the long-term
rating is Stable. The rating of '[ICRA]A4' has been assigned to
the INR1.7 crore short-term, non-fund based facilities of RPPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-Term Fund- 6.50 [ICRA]BB (Stable) assigned
based Limits
Term Loan 4.27 [ICRA]BB (Stable) assigned
Letter of Credit 1.20 [ICRA]A4 assigned
Bank Guarantee 0.50 [ICRA]A4 assigned
The ratings are constrained by the highly competitive nature of
the industry with low entry barriers and limited product
differentiation, and vulnerability of profitability to
fluctuations in polymer prices. The ratings also factor in the
company's customer and sector concentration risks and low
bargaining power with the customers and suppliers, resulting in
weak profitability. The financial profile is characterised by
modest profitability and modest debt coverage indicators. Further,
the liquidity position of the company is modest as reflected by
high utilisation of working capital limits, which is partly on
account of advances provided by the company to third parties. The
ratings, however, favourably factor in the established track
record of the promoters in the HDPE/PP woven sacks industry, the
favourable long-term demand prospects from the fertiliser and
cement industries and the company's established customer base in
Uttar Pradesh. The company is a part of the Ganga Group, with
other group entities also engaged in polywoven sack manufacturing
leading to synergies in procurement of raw materials. Going
forward, the ability of the company to sustain its revenues and
profitability and manage its liquidity position will be key rating
sensitivities.
RAS Polytex Private Limited (RPPL) is a private limited company
and was incorporated in the year 1999. The company is a part of
the Ganga Group of companies and is promoted by Mr. R.K.
Chaudhary. RPPL manufactures polypropylene (PP) bags primarily for
the UP-based cement industry. The company was established at
Varanasi (U.P.) to cater to the demand of the cement industries in
that region. The company currently has a manufacturing capacity of
6,000 metric tonnes per annum (MTPA).
Ganga Group is a collaboration of the Chaudhary and Tulsyan
families. The group is engaged in various businesses: polywoven
sacks through the entities RPPL, Ganga Bag Udyog Private Limited,
Neel Kamal Polytex Industries Private Limited and Quality Woven
Sacks Private Limited; paper through the entities Ganga Papers
India Limited and Ganga Pulp & Papers Private Limited; and sponge
iron and billet manufacturing through Shanti Gopal Concast
Limited.
In 2012-13, RPPL reported a net profit of INR0.99 crore on an
operating income of INR48.30 crore against net profit of INR0.90
crore on an operating income of INR38.00 crore in 2011-12.
RIELLO PCI: CRISIL Upgrades Rating on INR50MM Loans to 'BB'
-----------------------------------------------------------
CRISIL has upgraded its ratings on the bank loan facilities of
Riello PCI India Pvt Ltd to 'CRISIL BB/Stable/CRISIL A4+' from
'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50.0 CRISIL BB/Stable (Upgraded
from CRISIL B+/Stable)
Letter of Credit 50.0 CRISIL A4+ (Upgraded from
CRISIL A4)
The rating upgrade reflects CRISIL's belief that RPCIPL's
financial risk profile will improve over the medium term, as the
dividend payout ratio will depend on internal fund requirements
and excess cash accruals, if any. The company's total outside
liabilities to tangible net worth (TOLTNW) ratio could remain
healthy, below 3 times over the medium term. The company wholly
retained its profit after tax in 2012-13 (refers to financial
year, April 1 to March 31), resulting in a significant improvement
in its TOLTNW to 2.6 times as on March 31, 2013, compared to 12
times as on March 31, 2012. Moreover, RPCIPL's liquidity could
remain comfortable over the medium term with low incremental
working capital requirements, commensurate with low expected
growth, and is supported by the company's ability to stretch
payments to its creditors. RPCIPL has not utilized its cash credit
limits since June 2012, in the absence of a dividend payout in
2012-13.
The ratings reflect RPCIPL's ability to service its diverse and
reputed customer base, backed by its parent company's (RPS, S.p.A,
Italy; a static unlimited power supply [UPS] provider) established
global market position in the industrial UPS segment; and an
above-average financial risk profile. These rating strengths are
partially offset by the company's small scale of operations with
limited product diversity and exposure to risks related to foreign
exchange rate fluctuations on imports.
Outlook: Stable
CRISIL believes that RPCIPL's business risk profile will be
supported by its parent's established market position and
experience in the industrial UPS segment. The outlook may be
revised to 'Positive' if there is a significant improvement in
RPCIPL's scale of operations most likely supported by an increase
in the scale of operations in the less than 100 KVA (kilovolt
amperes) UPS segment, along with a sustained working capital
cycle. Conversely, the outlook may be revised to 'Negative' if the
company's profitability is constrained and/or its working capital
requirements increase.
RPCIPL was established in Gurgaon (Haryana) in 2010. It is a 55:45
joint venture between RPS, S.p.A, Italy and PCI Ltd, respectively.
The company trades in and services power conditioning systems.
RPCIPL has exclusive tie-ups with its parent company RPS, S.p.A,
Italy; the company imports UPS systems from RPS, S.p.A, Italy and
installs batteries (which are procured locally), trays,
switchgears, and cabling to the main equipment, for end-customers.
The company specialises in UPS systems with a capacity of above
100 KVA. These systems are used in the manufacturing industry,
data centres, hotels, and hospitals for critical applications.
RPCIPL reported a profit after tax (PAT) of INR62.5 million on net
sales of INR919.5 million for 2012-13; and a PAT of INR82.6
million on net sales of INR977.8 million for 2011-12.
ROSELABS POLYMERS: CARE Cuts Ratings on INR65cr Loans to 'D'
------------------------------------------------------------
CARE revises the ratings assigned to the bank facilities of
Roselabs Polymers Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 58.50 CARE D Revised
Facilities from CARE B
Short-term Bank 6.50 CARE D Revised
Facilities from CARE A4
Rating Rationale
The revision in ratings assigned to the bank facilities of
Roselabs Polymers Limited primarily factors in irregularity in
servicing of its debt obligations.
RPL was jointly promoted by Mr Pawankumar Agarwal and Mr Zameer
Agarwal along with Mr Prakash Patel in 2011 to established the
business of manufacturing plastic pre-filled syringes and its
component, with annual installed capacity of 1.08 crore pieces at
Bavla, Ahmedabad, Gujarat. The commercial production commenced in
November 2012.
Further in FY13 (refers to period from April 1 to March 31), the
company started a new project (a forward integration) to
manufacture prefilled sterilized syringes (PFS). The commercial
production is expected to commence from July 2013.
RYDAK SYNDICATE: CARE Assigns 'BB' Rating to INR13.19cr Loans
-------------------------------------------------------------
CARE assigns 'CARE BB' and 'CARE A4+' ratings to the bank
facilities of Rydak Syndicate Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 13.19 CARE BB Assigned
Facilities
Short-term Bank 0.80 CARE A4+ Assigned
Facilities
Rating Rationale
The ratings assigned to the bank facilities of Rydak Syndicate Ltd
are constrained by its modest scale of operations, leveraged
capital structure, susceptible to volatile tea prices, highly
labour intensive nature of the industry entailing substantial
employee expenses, working capital intensive nature of business,
intense competition and inherent susceptibility of green leaf
availability to the vagaries of nature.
The above constraints are partially offset by the strengths
derived from the long track record and experience of the
management in the tea industry, backward integration for raw
material, satisfactory capacity utilisation with in-line recovery
rate and stable outlook of the tea industry. The ability of the
company to improve the scale of operations along with
profitability while managing the working capital effectively would
remain the key rating sensitivities.
Rydak Syndicate Ltd was incorporated in February 1898 as a
subsidiary of Jardine Henderson Ltd, for cultivating and
manufacturing black tea. Jardine, which was managed by Britishers,
held a controlling stake in RSL. In 1946, the company was acquired
by Mr SG Mehta and family, who took a controlling stake in
Jardine. Over the years, the company has increased its
tea processing capacity, in phases to 7 million kg per annum of
CTC (Crush, Tear and Curl) tea.
RSL presently has six tea estates, on a 999-year lease, (three in
Dooars section of Darjeeling, West Bengal and three in Upper
Assam) and six manufacturing facilities located near the tea
estates, which process the leaf from all the six gardens. The
aggregate area available for cultivation is 3,447.02 hectares, of
which, the area under cultivation is 3,356.96 hectare.
In FY13 (refers to the period April 01 to March 31), RSL reported
a PBILDT of INR6.6 crore and PAT of INR1.5 crore on a total
operating income of INR67.0 crore.
SAGAR CEMENTS: CRISIL Cuts Ratings on INR2.95BB Loans to 'BB'
-------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of Sagar
Cements Ltd to 'CRISIL BB/Negative/CRISIL A4+' from 'CRISIL BBB-
/Negative/CRISIL A3'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 55.0 CRISIL A4+ (Downgraded from
'CRISIL A3')
Cash Credit 864.0 CRISIL BB/Negative (Downgraded
from 'CRISIL BBB-/Negative')
Letter of Credit 125.0 CRISIL A4+ (Downgraded from
'CRISIL A3')
Term Loan 1,950.0 CRISIL BB/ Negative (Downgraded
from 'CRISIL BBB-/Negative')
Proposed Term Loan 136.0 CRISIL BB/ Negative (Downgraded
from 'CRISIL BBB-/Negative')
The rating downgrade reflects more-than-expected deterioration in
SCL's business risk profile on account of weak cement demand in
Andhra Pradesh, and low capacity utilisation by the company. SCL
reported a net loss of INR58.3 million for the six months ended
September 30, 2013, which resulted in stretched liquidity.
Furthermore, the company's utilisation of its working capital
limits has been high, at an average of around 92 per cent during
the 12 months through October 2013. Besides, SCL's term debt
obligations of INR530 million in 2013-14 (refers to financial
year, April 1 to March 31) are high as compared with its expected
net cash accruals during the year. CRISIL believes that SCL's
financial risk profile will remain weak, with stretched liquidity,
over the medium term, on account of the continued subdued demand
for cement in Andhra Pradesh. Its liquidity is, however, expected
to be supported by unsecured loans from the promoters.
The ratings reflect the increased geographical diversification in
SCL's revenue profile, and its moderate operating efficiency,
supported by its proximity to major raw material resources. These
rating strengths are partially offset by the company's
susceptibility to cyclicality in the cement business and to risks
related to the commodity nature of cement.
Outlook: Negative
CRISIL believes that SCL's operating performance will remain under
pressure over the medium term due to moderation in demand for
cement in southern India. The company's liquidity is likely to
remain stretched over this period as its debt repayments will be
tightly matched with the expected net cash accruals. The ratings
may be downgraded if there is further deterioration in SCL's
operating performance, resulting in lower accruals, or if it
contracts more-than-expected debt to fund its ongoing capital
expenditure. Conversely, the outlook may be revised to 'Stable' if
the company's operating performance improves, resulting in better-
than-expected cash accruals.
SCL, which commenced operations in 1985, manufactures cement.
Currently, the company has clinker manufacturing capacity of 2.00
million tonnes per annum (mtpa) and cement manufacturing/grinding
capacity of 2.69 mtpa. It manufactures ordinary portland cement,
portland pozzolana cement, and sulphate-resistant cement.
SCL's Sagar brand has an established position across southern
India as well as in Maharashtra, Odisha, and Chhattisgarh. SCL, in
a 47:53 joint venture with Vicat SA, France, is setting up a 5.5-
mtpa cement plant in Gulbarga (Karnataka).
For 2012-13, SCL reported a profit after tax (PAT) of INR88
million on net sales of INR5.6 billion, against a PAT of INR440
million on net sales of INR6.1 billion for 2011-12. For the half
year ended September 30, 2013, the company reported a net loss of
INR58.3 million on net sales of INR2.24 billion, against a PAT of
INR89.4 million on net sales of INR2.85 billion for the
corresponding period of the previous year.
SEJASMI INDUSTRIES: CRISIL Reaffirms C Ratings on INR128.9MM Loan
-----------------------------------------------------------------
CRISIL's rating on the long term bank facilities of Sejasmi
Industries (India) Pvt Ltd continue to reflect the company's
constrained liquidity because of significantly lower-than-expected
revenue and profitability, adversely impacting its accruals and
debt protection metrics. Though SIPL continued to generate
negative cash accruals in 2012-13 (refers to financial year, April
1 to March 31), it met its debt obligations on time because of
infusion of unsecured loans by its directors.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 30.0 CRISIL C (Reaffirmed)
Rupee-Term Loan 29.4 CRISIL C (Reaffirmed)
Proposed Long-Term 69.5 CRISIL C (Reaffirmed)
Bank Loan Facility
The ratings also reflect SIPL's small scale of operations with
limited revenue diversity, and weak financial risk profile marked
by small net worth and high gearing. These rating weaknesses are
partially offset by the extensive industry experience of SIPL's
promoters.
Update
SIPL reported net sales of INR92 million in 2012-13, a decline of
around 34 per cent over the previous year (Rs.133 million in 2011-
12). For the six months ended September 30, 2013, SIPL achieved
sales of around INR29 million. SIPL's operating margin improved to
15 per cent for the six months of 2012-14 (negative 29 per cent in
2011-12). SIPL's financial risk profile remains constrained by
high gearing of 5.03 times and small net worth as on March 31,
2013. Its debt protection metrics also remained weak, with net
cash accruals to total debt ratio of negative 0.04 times and
interest coverage ratio of 0.5 times for 2012-13.
For 2012-13, SIPL reported a net loss of INR16 million on net
sales of INR92 million, against a net loss of INR68 million on net
sales of INR133 million for 2011-12.
SIPL, incorporated in 2006 and based in Gandhinagar (Gujarat),
manufactures aluminum die casting products, which are used in the
automotive, electrical, and engineering industries, among others.
SHETH AND POPAT: CARE Rates INR10cr LT Bank Loans at 'B+'
---------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Sheth and
Popat Enterprises.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 10 CARE B+ Assigned
Facilities
The ratings assigned by CARE are based on the capital deployed by
the partners and the financial strength of the firm at present.
The ratings may undergo a change in case of withdrawal of the
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 Sheth and Popat
Enterprises is constrained on account of the implementation risk
associated with its on-going real estate project, moderate
booking status of the project, competition from other real estate
players in the region and constitution of the firm as a
partnership concern.
The above-mentioned constraints far outweigh the strengths derived
from the considerable experience of the promoters in the real
estate industry, strategic location, satisfactory progress
along with financial closure achieved for the project.
Completion of the ongoing project without any time and cost
overrun and the ability to sell the space in a highly competitive
scenario at the envisaged prices and in a timely manner are the
key rating sensitivities.
Sheth and Popat Enterprises is part of the Pune-based real estate
developers, Sheth Realty Group. The group has an average
industrial experience of 15 years in the Pune real estate market,
having developed many residential real estate projects in the city
since 1988. SPE is established in the year 2012 as a partnership
firm between Mr Rupesh Sheth, Mr Girish Popat and Mr Vishal
Popat to execute real estate project at Wakad, Pune. The partners
have an extensive experience in liaison and execution of
construction projects.
Currently SPE is developing an Integrated Township at Wakad, Pune
with a total saleable area of 1.12 lakh square feet (lsf). SPE is
developing the land in three phases, out of which two phases have
already been launched. The construction of Phase I is under
progress and the construction for Phase II is expected to start
subsequent to the building plan approval from the concerned
authorities.
SHIV HEALTH: CARE Reaffirms 'BB' Rating on INR18.14cr LT Loans
--------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Shiv Health Foods LLP.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 18.14 CARE BB 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 ratings may undergo a change in case of a withdrawal of the
capital or the unsecured loans brought by the partners in addition
to the financial performance and other relevant factors.
Rating Rationale
The rating assigned to the bank facilities of Shiv Health Foods
LLP continues to remain constrained on account of its short track
record of operations, limited experience of the promoters
in the dairy industry, limited geographical presence and stiff
pricing competition for procurement of raw material from local
dairy unions in the region. The rating factors in the increase in
total operating income and cash accruals and improvement in the
capital structure during FY13 (refers to the period April 1 to
March 31).
The rating, however, continues to remain constrained due to the
modest operating profit margin and net losses, leveraged capital
structure, weak debt coverage and liquidity indicators along with
long inventory holding period.
The above mentioned constraints continue to off-set the benefits
derived from the experienced & resourceful promoters and good
growth prospects for the dairy industry in the region.
SHF's ability to increase its scale of operations through optimum
capacity utilization and increasing market presence thereby
generating the envisaged cash accruals along with timely receipt
of subsidy from the Ministry of Food Processing Industries and
improvement in the capital structure and working capital
management are the key rating sensitivities.
Setup in 2010 as a limited liability partnership (LLP), Shiv
Health Foods LLP is formed by five partners comprising members
from the Saboo family (ie, promoter's family) and a corporate
entity Shiv Agrevo Limited, (having 35% stack in the entity )
owned by the same promoter. SHF commenced its commercial
operations from November 2011.
SHF is engaged in the business of processing milk and producing
milk products from its manufacturing facility located in Kota,
Rajasthan. The firm operates with an installed milk processing
capacity of 2 Lakh Litres Per Day (LLPD) as on March 31, 2013 and
sells milk and various allied products such as milk powder,
butter, ghee, paneer, curd and butter milk in nearby regions under
its own brand name 'Kota Fresh'. The firm has set up nine chilling
centres to procure milk which covers 20-30 villages in Rajasthan.
As per the audited results for FY13, SHF reported a net loss of
INR1.12 crore (a net loss of INR1.67 crore in FY12) on a total
operating income of INR57.11 crore (Rs.11.77 crore in FY12).
SHREE ELECTROMELTS: CRISIL Suspends BB+ Rating on INR60MM Loan
--------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Shree
Electromelts Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 60 CRISIL BB+/Stable Suspended
Letter of Credit 300 CRISIL A4+ Suspended
The suspension of ratings is on account of non-cooperation by SEL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SEL is yet to
provide adequate information to enable CRISIL to assess SEL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
Incorporated in 1992, SEL manufactures mild steel ingots
(comprises around 45 per cent of its revenues) and low ash
metallurgical coking coal (around 55 per cent revenues). Based in
Bhavnagar (Gujarat), SEL is owned and managed by Mr. R K Jain and
his family members. It has two manufacturing facilities in
Bhavnagar with installed capacity of 36,000 tonnes per annum (tpa)
for coking coal and 18,000 tpa for ingots.
SRINIVASA EDIFICE: ICRA Suspends 'D' Rating on INR22cr Loans
------------------------------------------------------------
ICRA has suspended long-term rating of '[ICRA]D' outstanding on
the INR22.00 crore fund-based limits of Srinivasa Edifice Private
Limited. ICRA has also suspended the short term rating of
'[ICRA]D' outstanding on the INR25.00 crore non fund based
facilities of SEPL. The suspension follows ICRA's inability to
carry out a rating surveillance in the absence of the requisite
information from the company.
According to its suspension policy, ICRA may suspend any rating
outstanding if in its opinion there is insufficient information to
assess such rating during the surveillance exercise.
SUMINTER INDIA: ICRA Reaffirms 'BB+' Rating on INR30cr LT Loans
---------------------------------------------------------------
The long-term rating of '[ICRA]BB+' has been reaffirmed for the
INR30.00 crore (enhanced from INR15.0 crore) fund-based limits of
Suminter India Organics Private Limited. Further, the short-term
rating of '[ICRA]A4+' has been reaffirmed for the INR15.00 crore
short-term fund-based limits (enhanced from NIL) and the INR30.0
crore short-term sub-limits of the long-term limits of SIOPL. The
outlook on the long term rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term fund- 30.0 [ICRA]BB+ (Stable)
based limits reaffirmed/assigned
Short-term fund- 45.0 [ICRA]A4+ reaffirmed/assigned
based limits
While arriving at the rating, ICRA has taken a consolidated view
of SIOPL's financials along with its subsidiary BOIPL, in view of
the cross financial guarantees extended and other operational,
financial and managerial linkages between these companies.
The reaffirmation of the ratings continues to reflect the
established presence of the company in organic farming and
distribution activities also as reflected in gradual improvement
in the scale of operations, and the robust growth and favourable
long-term demand prospects for organic products globally. The
ratings also favourably factor in the company's well diversified
customer base; experience available in organic processing,
fumigation and steam sterilization areas through its subsidiary
viz. Bergwerff Organics India Private Limited (BOIPL); as well as
the comfortable capital structure at present.
However, the ratings remain constrained by the competition from
other established and smaller participants in the organic product
industry as also reflected in limited profitability in the
operations as well as the risk of slowdown in demand due to
present difficult economic conditions in the developed economies
in Europe and USA, which are the key markets for organic products
globally. The ratings are further constrained by the exposure to
Government policy governing exports of agricultural produce from
India as well as the Minimum Support Price (MSP) mechanism. The
ratings also take into account the high working capital intensity
in the operations and vulnerability of the profitability to both
the volatility in the prices of key raw materials i.e. agro-
commodities, as well as foreign exchange fluctuation risks,
although the latter risk is partly mitigated to the extent of
hedging done by the company. The rating also takes into account
the financial support extended to the subsidiary viz. BOIPL by way
of equity and unsecured loan funding, corporate guarantee extended
to cover its bank facilities, as well as extended credit period on
sales. The ability of the company to manage the working capital
intensity, and improve profit margins through scale augmentation
and greater diversification of product mix will remain crucial
from a credit perspective.
Suminter India Organics Private Limited (SIOPL), established in
2004, is primarily engaged in organic farming and distribution
activities. The company's business is built around the conversion
of small-scale farms in India to international organic standards
and it caters to the premium global organic product market.
Presently, SIOPL operates in two main product segments - I)
Cotton, and ii) Food. Within the food segment, the company deals
mainly in spices and oilseeds. Besides dealing in organic
certified products, the company also deals in Fair Trade cotton.
The company is promoted by Mr. Sameer Mehra, and has received
equity funding from Nexus Venture Investments (India), Pacific
Sequoia LLC, The Skoll Foundation, and Skoll Fund. SIOPL holds
68.5% in Bergwerff Organics India Private Limited, which is
engaged in organic processing, fumigation and sterilisation areas.
SUNDARAM STEELS: CARE Assigns 'B+' Rating to INR13.07cr Loans
-------------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Sundaram
Steels Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 13.07 CARE B+ Assigned
Facilities
Rating Rationale
The rating assigned to the bank facilities of Sundaram Steels
Private Limited is primarily constrained by its small scale and
short track record of operations, leveraged capital structure and
working capital intensive nature of operations. The ratings are
further constrained by the exposure to raw material price
volatility and cyclicality associated with the steel industry.
The rating, however, finds support from the experienced promoters.
Going forward, the ability of the company to profitably scale up
the operations, effective working capital management and
improvement in its capital structure are the key rating
sensitivities.
SSPL was incorporated in 2008 by Mr Yogesh Manek, Mr Anurag
Singhaia, Mr Shriyans Kumar Jain along with other family members
of Mr SK Jain. The commercial operations of the company started in
April 2012. The company is engaged in the manufacturing of sponge
iron. The manufacturing facility of SSPL is located at Bokarao in
Jharkhand with an installed capacity of 27,000 TPA. The
product finds its usage in the induction furnace industry and the
company sells its product directly to companies based out in Uttar
Pradesh & Jharkhand. The major raw materials for the company are
iron ore, coal and limestone.
For FY13 (refers to the period April 1 to March 31), SSPL achieved
a total operating income of INR30.94 crore and PAT of INR0.29
crore. In 5MFY14, the company had achieved a total operating
income of INR15 crore.
SUSEE AUTO: ICRA Cuts Ratings on INR15.5cr Loans to 'B'
-------------------------------------------------------
ICRA has revised the rating outstanding on the INR7.25 crore long
term fund based facilities and the INR8.25 crore proposed long
term facilities of Susee Auto Spares Private Limited to '[ICRA]B'
from '[ICRA]B+'. ICRA has also reaffirmed the rating outstanding
on the INR3.50 crore short term non fund based facilities of the
company at '[ICRA]A4'.
While arriving at the ratings, ICRA has considered the
consolidated risk profile of i) Susee Automobiles Private Limited
(SAPL, rated [ICRA]BB- (Stable)), ii) Susee Auto Sales and Service
Private Limited (SASSPL, rated [ICRA]D / [ICRA]D) and its
subsidiary, SASPL, and iii) Susee Premium Automobiles Private
Limited (SPAPL).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term fund 7.25 Revised to [ICRA]B
based facilities from [ICRA]B+
Proposed long 8.25 Revised to [ICRA]B
term facilities from [ICRA]B+
Short term non 3.50 Reaffirmed at [ICRA]A4
fund based
facilities
The rating revision reflects the deterioration in financial
profile of the company following a) additional distributorships
offered by Maruti Suzuki India Limited in certain territories
catered to by the company, and b) loss of distributorships in
certain other territories to competitors, for the Maruti Genuine
Parts (MGPs) business. While the inability to absorb fixed costs
following decline in revenues on account of the aforementioned
developments has resulted in net losses 2012-13, the drop in
SASPL's sales volumes has also resulted in piling up of inventory,
as on March 31, 2013. As a cascading effect, SASPL's networth has
been eroded and debt levels have increased, resulting in weakening
of capital structure for the company; Further, SASPL has had
frequent overutilizations in working capital facilities as well in
the last few months.
The ratings are also constrained by the deterioration in SASPL's
coverage metrics and its significant intragroup transactions. The
ratings, however, positively factor in the established presence of
the group in the auto dealership and spares space in Tamil Nadu
and the company's diversified product portfolio comprising of
Maruti Genuine Parts (MGP), Bajaj spares, Mobil lubricants and
those of other original equipment manufacturers (OEMs) including
Fenner, Bosch and TVS Tyres to name a few, in various regions in
Tamil Nadu.
Incorporated in 2004, Susee Auto Spares Private Limited is a)
authorised distributor for Maruti Genuine Parts (MGP) in Chennai
and various other tier 2/ 3 cities of Tamil Nadu, b) authorised
distributor for Bajaj spares for two wheelers, three wheelers and
commercial vehicles in Chennai and Madurai, and c) distributor for
Mobil lubricants in Chennai, apart from distributing spare parts
of several other original equipment manufacturers (OEMs) including
Bosch, Fenner and TVS Tyres to name a few. The company was also
the sole authorised distributor in Chennai and Madurai for
Mahindra Commercial Vehicles spares till March 2013. SASPL is a
wholly owned subsidiary of Susee Auto Sales and Service Private
Limited (SASSPL), which handles dealerships for Mahindra Tractors,
Mahindra Trucks and Buses (MTB) and Club Mahindra holiday packages
in various regions of Tamil Nadu.
SWADHAAR FINSERVE: ICRA Rates INR30cr Debentures at 'BB'
---------------------------------------------------------
ICRA has assigned the rating of '[ICRA]BB' with a stable outlook
to the INR30 Crore non convertible debentures of Swadhaar FinServe
Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Non Convertible 30.00 ICRA]BB(stable) assigned
Debentures
The rating factors in SFPL's modest scale of operations (managed
portfolio size of INR145 crores as on Sep-13) and relatively high
pace of growth (company has grown at a CAGR of 82% over the last
two years), geographical concentration of portfolio (portfolio is
currently concentrated in 15 districts of Maharashtra and
Gujarat), weak profitability indicators (Return on Managed Assets
of 0.20% in H12013-14 and 0.87% in 2012-13) and lack of diversity
in earnings. Though the company has adequate credit appraisal and
monitoring processes supported by good Management Information
Systems (MIS), however the internal controls and audit processes
are inadequate given the higher risks associated with urban
lending and the differentiated operating model of the company.
Unlike most of the NBFC MFIs which follow a
weekly/fortnightly/monthly repayment frequency based lending
model, SFPL does not conduct centre meetings and collects the
repayment through the group leader at a monthly frequency. This,
coupled with the company's presence in urban areas where
delinquencies tend to be higher has led to relatively higher
delinquencies vis-a-vis other NBFC-MFIs (30+ dpd of 1.07% as on
Sept-13, on excluding the portfolio >180+ overdue which has been
fully provided for, the company reported 30+dpd of 0.80%.) The
rating is also constrained by risks associated with the unsecured
lending business, political risks, operational risks arising out
of cash handling, and dependence on wholesale funding sources,
although establishment of credit information bureau and
disciplined lending post the introduction of norms for MFIs by RBI
are likely to mitigate some of risks associated with unsecured
lending.
The rating positively factors in the funding and technical support
from its investor Accion (which holds 36% stake in the company).
Further, the rating draws comfort from SFPL's experienced
management team, adequate capitalisation levels and improved
financial flexibility of the company with the addition in number
of quality of lenders (the company added 4 private and public
sector banks in H12013-14 and FY2012-13 taking overall number of
lenders to 12, albeit at relatively higher cost). The
diversification of funding across a wider lender base through
multiple instruments would be important for reduction in cost of
funds. Further, the rating takes into account the steps taken by
the company to geographically diversify its portfolio by expanding
into Rajasthan and Madhya Pradesh.
Overall profitability of SFPL continue to remain low (PAT of
INR0.19 crores in H12013-14, INR1.16 crores in 2012-13) primarily
on account of relatively higher cost of funds and higher operating
expenses. The company has an average cost of funds of 16.3%.
During FY13, the company has been successful in reducing its
operating expenses as a percentage of Average Managed Assets to
10.99% in FY13 from 16.51% in FY12 by branch mergers and employee
cost controls. The operating expenses, however, continue to remain
on the higher side. Going forward, ICRA expects profitability
indicators to improve on account of the improvement in spreads to
10% with the decline in cost of funds and lower operating expenses
of ~9-10%. Both these factors are likely to result in improvement
in profitability indicators to 2.5-3% in the medium term.
SWARNSARITA GEMS: ICRA Rates INR8cr Long-Term Loans at 'BB'
-----------------------------------------------------------
ICRA has assigned a long term rating of '[ICRA]BB' to the INR8.0
Crore Cash Credit and INR8.0 Crore untied fund based facilities of
Swarnsarita Gems Limited. The outlook on the long term rating is
'stable'. ICRA has also assigned a short term rating of
'[ICRA]A4+' to the INR29.0 Crore short term fund based facilities
of the company. The untied INR8.0 Crore limit is also rated on the
short term scale at '[ICRA]A4+', as such the total utilization
should not exceed INR45.0 Crore at any point of usage.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term, Fund- 8.00 [ICRA]BB (stable) assigned
based limits
(Cash Credit)
Short-term, Fund 29.00 [ICRA]A4+ assigned
based limits
(Gold Loan)
Long term/Short Term- 8.00 [ICRA]BB (stable)/
Interchangeable [ICRA]A4+ assigned
The ratings take into account the promoters' long experience and
operating track record of almost two decades in gems and jewellery
industry and the healthy revenue growth during last two fiscals on
a consolidated basis and comfortable gearing levels as on FY2013.
The ratings are however constrained by the weak profitability and
low return indicators, given large part of money is stuck in
advances to suppliers as well as its subsidiary. ICRA notes the
high working capital intensive nature of operations, given the
high inventory holding and exposure to intense competition in the
jewellery wholesale business. The recent regulatory developments
post April 2013, including the import duty hike and sourcing
restrictions on gold, are likely to further compress its
profitability along with revenue growth.
Swarnsarita Gems Limited (erstwhile Shyam Star Gems Ltd.)
commenced operations in 1989 as a partnership firm and was engaged
in the business of importing Australian Rough Diamonds, polishing
& processing the Diamonds and exporting the same. It was
incorporated as a private limited company in 1992 and was
subsequently converted into a public limited company in the same
year. The company was acquired by Swarnasarita Jewellers Private
Limited in 2011 and was renamed as 'Swarnasarita Gems Limited'.
SSGL is a manufacturer and wholesaler of gold and diamond
ornaments. The company deals in various types of gold and diamond
jewellery including necklaces, bangles, earrings etc. Gold
jewellery is largely manufactured in-house (including finishing
and designing work) at its manufacturing facility in Zaveri
Bazaar, Mumbai. In case of intricate designs, it outsources the
manufacturing to specialised players.
The group also has a 1,000 square feet showroom in Zaveri Bazaar
where it stocks gold inventory for display to prospective
customers. The Chairman & Managing Director of the company. Mr.
Mahendra M Chordia has more than 20 years of experience in the
field of jewellery manufacturing.
Recent results:
As per its audited results for FY 2012-13, SSGL reported profit
after tax (PAT) of INR1.59 crore on operating income of INR156.87
crore.
SWARNSARITA JEWELLERS: ICRA Assigns 'BB' Rating to INR15cr Loans
----------------------------------------------------------------
ICRA has assigned a long term rating of '[ICRA]BB' to the INR15.0
Crore Cash Credit and INR20.0 Crore untied fund based facilities
of Swarnsarita Jewellers Private Limited. The outlook on the long
term rating is 'stable'. The untied INR20.0 Crore limit is also
rated on the short term scale at '[ICRA]A4+', as such the total
utilization should not exceed INR35.0 Crore at any point of usage.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term, Fund- 15.00 [ICRA]BB (stable) assigned
based limits
(Cash Credit)
Long term/Short 20.00 [ICRA]BB (stable)/
Term-Interchangeable [ICRA]A4+ assigned
The ratings take into account the promoters' long experience and
operating track record of almost two decades in gems and jewellery
industry and the healthy revenue growth during last two fiscals on
a consolidated basis and comfortable gearing levels as on FY2013.
The ratings are however constrained by the weak profitability and
low return indicators, given large part of money is stuck in
advances to different suppliers as well as subsidiary of SSGL.
ICRA notes the high working capital intensive nature of
operations, given the high inventory holding and exposure to
intense competition in the jewellery wholesale business. The
recent regulatory developments post April 2013, including the
import duty hike and sourcing restrictions on gold, are likely to
further compress its profitability along with revenue growth.
Swarnsarita Jewellers Private Limited (SSJPL), established in
2000, is a manufacturer and wholesaler of gold ornaments. The
company deals in various types of gold jewellery including
necklaces, bangles, earrings etc. SSJPL specialises in
manufacturing of specialised jewellery like Meenakari jewellery.
Gold jewellery is largely manufactured in-house (including
finishing and designing work) at its manufacturing facility in
Zaveri Bazaar, Mumbai. In case of intricate designs, the
manufacturing is outsourced to specialised players. The company
also has a 1,000 square feet showroom in Zaveri Bazaar where it
stocks gold inventory for display to prospective customers.
From FY14 onwards, the company commenced exports to international
branches of existing clients eg: Malabar Gold, Shantilal Jewellers
etc. For H1FY13, exports contributed 42% of total revenues for
SSJPL.
Recent results:
As per its audited results for FY 2012-13, SSJPL reported profit
after tax (PAT) of INR0.76 crore on operating income of INR68.55
crore.
TIJARIA POLYPIPES: ICRA Suspends 'BB-' Rating on INR50.45cr Loans
-----------------------------------------------------------------
ICRA has suspended the '[ICRA]BB-' (Negative) rating assigned to
the INR50.45 crore term loans and long term fund based working
capital facilities and the [ICRA]A4 rating assigned to the
INR10.00 crore, short term, non fund based letter of credit and
bank guarantee facilities of Tijaria Polypipes Limited. The
suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
According to its suspension policy, ICRA may suspend any rating
outstanding if in its opinion there is insufficient information to
assess such rating during the surveillance exercise.
TRUBA EDUCATION: ICRA Suspends 'D' Rating on INR9cr Loans
---------------------------------------------------------
ICRA has suspended the long-term rating of '[ICRA]D' assigned
earlier to the INR9 crore, fund-based bank facilities of Truba
Education Society. The suspension follows ICRA's inability to
carry out a rating surveillance in the absence of the requisite
information from the society.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based bank 9.00 [ICRA]D Suspended
facilities
Registered in 2003 under the Madhya Pradesh Society Registration
Act 1979, Truba Education Society (TES) owns and operates an
Engineering cum Management college in Indore namely, Truba College
of Engineering & Technology (TCET). TCET is a ISO 9001:2000
Certified, All India Council for Technical Education (AICTE)
approved college which was established in 2005 to offer Bachelor
Degree's Programmes in these four core branches: Computer Science
& Engineering (CSE), Information Technology (IT), Electronics &
Communication (EC), and Mechanical Engineering (ME). The
Institute offers BE courses (across five branches), M. Tech
courses (across three branches) and MBA programme for its
students. The TCET Campus is spread over 15 acres of land on the
Indore - Dewas Highway. The institute is also a member of the
Computer Society of India (CSI).
VARIA ALUMINIUM: ICRA Suspends 'BB-' Ratings on INR80cr Loans
-------------------------------------------------------------
ICRA has suspended the '[ICRA]BB-(Stable)' rating assigned to the
INR30.00 crore cash credit facility and INR50.00 crore term loans
facility of Varia Aluminium Private Limited. ICRA has also
suspended the short term ratings for the INR15.00 crore each for
Letter of credit and Buyer's Credit (sub-limits of cash credit
limits) which have been rated on short term scale at '[ICRA]A4'.
The suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
According to its suspension policy, ICRA may suspend any rating
outstanding if in its opinion there is insufficient information to
assess such rating during the surveillance exercise.
Varia Aluminium Pvt. Ltd., a Private Limited Company was
originally incorporated as Varia Corporate Business House Pvt. Ltd
in February 2010, however the name of the company was later
changed to Varia Aluminium Pvt. Ltd. in November 2010. VAPL is
setting up an Aluminium plant for manufacturing HR Aluminium
Coils, CR Aluminium Coils, Aluminium Foils and Coated, Laminated
and Printed Foils. The installed capacity of the plant will be
30,000 Tonnes per annum.
The promoter of the company Mr. Prafulchandra P. Varia also
promotes another company, Varia Engineering Works Pvt. Ltd. which
is engaged in machinery manufacturing and steel rolled products.
The machinery division of this company has over the years
manufactured machineries for the production of Hot Roll Sheets,
Cold Roll Sheets, Stainless Steel Coil and Sheets, Mild Steel
Coils and Sheets, Aluminum Coil and Foils, etc. The other
associate concerns of the company are M/s. Himanshu Engineering
Works which is involved in manufacturing of engineering parts and
Varia Infrastructure Private Limited which was incorporated for
taking up the turnkey project for setting up the machineries.
=================
I N D O N E S I A
=================
MNC SKY: Unit's $165MM Bond Redemption Credit Pos, Says Moody's
---------------------------------------------------------------
Aerospace Satellite Corporation, a wholly owned unit of MNC Sky
Vision (P.T.) (B2 positive), said November 18 that it plans to
redeem $165 million 12.75% senior secured notes due 2015, a credit
positive because it will extend Sky Vision's debt maturity profile
and significantly lower its cost of funding.
Although details of the financing for the redemption have not been
disclosed, Moody's expects the company to fund the redemption with
longer-dated bank loans and at a lower interest rate than the
current coupon rate, both of which are credit positives. A US
dollar funding is likely as a portion of its content costs and
capex are denominated in US dollars.
According to the company's announcement, the redemption will be
closed on 12 December at an aggregate amount of $177 million,
which consists of $165 million of principal amount outstanding,
plus accrued and unpaid interest of $1.5 million and a call
premium of $10.5 million.
Sky Vision's senior secured bonds have weighed heavily on its cash
flows because the 12.75% coupon payments have comprised more than
20% of its EBITDA. A reduction in interest costs will help offset
some of the effect of the currency mismatch between its Rupiah
revenues and US dollar denominated interest costs.
Given its subscriber growth trajectory of above 20% per annum,
Moody's expects capex will remain high over the next two years, at
around IDR1 trillion ($85-$90 million) per annum. As a result,
Moody's identified a need to secure additional external funding of
approximately $50 million in 2014 to fund its capex and working
capital requirements, which will support its continued growth.
Because this has weighed on the company's credit profile, filling
this funding gap at this time is another credit positive.
Historically, the company has not had any committed long-term
credit facilities. Given its growth trajectory and capital
intensity, stable access to capital is crucial for its credit and
liquidity profiles. A successful long-term refinancing of its
bonds therefore would be credit positive.
Given its strong credit metrics relative to its B2 rating, Sky
Vision has a sufficient financial cushion to increase its debt by
an additional $50-$75 million and still maintain its debt/EBITDA
ratio at below 2.5x, even when assuming a further 10% depreciation
in the Indonesian rupiah. Furthermore, the decrease in interest
cost will provide significant cash flow benefits and improve its
interest coverage ratio from the current 5.5x range.
Despite the effect of the depreciating rupiah on Sky Vision's
financials, Moody's expects its performance for the first nine
months of 2013 and outlook for 2014 will continue to support
EBITDA margins at above 40%.
An upgrade is possible over the near term, should the company
successfully complete its refinancing as per Moody's assumptions,
that is, 1) extending its debt maturity profile beyond 2015, 2)
materially lowering its associated interest cost, and 3) securing
an additional $50-$75 million to fund its capex and working
capital needs.
Headquartered in Jakarta, MNC Sky Vision is a provider of direct-
to-home, Pay TV services. The company is 66% owned by PT Global
Mediacom Tbk, a diversified media company, and in which PT Bhakti
Investama Tbk owns a 53.4% stake. Both Global Mediacom and Bhakti
Investama are publicly listed in Indonesia.
=========
J A P A N
=========
ASAHI MUTUAL: Fitch Affirms IFS Rating at 'BB'
----------------------------------------------
Fitch Ratings has revised Japan-based Asahi Mutual Life Insurance
Company's Outlook to Positive from Stable and affirmed its Insurer
Financial Strength (IFS) Rating at 'BB'.
Key Rating Drivers:
The Outlook revision reflects Asahi Life's improvement in its
capital adequacy and its resilient insurance underwriting backed
by growth in its more profitable third (health) sector.
Asahi Life's statutory solvency margin ratio (SMR) has improved
(495.8% at end-March 2013 versus 426.6% at end-March 2012) due to
its risk reduction efforts and higher unrealised gains on
securities. The company reduced the book value of its domestic
equity holdings to JPY211bn at end-March 2013 from JPY270bn a year
earlier, and Fitch expects Asahi Life to continue cutting its
equity holdings.
Its insurance underwriting business has been stable due to its
focus on the more profitable third sector. Annual premiums of in-
force policies of Asahi Life's third sector grew 2.2% in FYE13
(the financial year ended March 2013), partly because it launched
an insurance product for the care of the disabled and elderly,
ahead of most of its peers.
Nevertheless, in comparison with its peers' average SMR of more
than 700%, Asahi Life's capital position is weak. In addition,
Asahi Life's negative spread burden remains sizable and continues
to offset gains from better-than-projected mortality and morbidity
rates. However, Fitch expects the negative spread burden to
moderately shrink due to gradually declining average guaranteed
yields over the medium term.
Asahi Life is the ninth-largest life insurance group in Japan by
value of policies in-force at end-March 2013.
Rating Sensitivities:
Key rating triggers for an upgrade include: a further
strengthening of capitalisation, particularly if the SMR remains
well above 400% on a sustained basis; further improvement in
Fitch's internal capitalisation measure; and a decline in
financial leverage (with foundation funds called kikin treated as
debt) to below 45%, for a prolonged period. Growth in the
company's third sector and improvement in the surrender and lapse
rates of its death protection products would also be viewed
positively by Fitch.
Key rating triggers for a downgrade include: material erosion of
capitalisation, specifically, a decline in the SMR to below 300%
or deterioration in Fitch's internal capitalisation measure on a
sustained basis. Significant deterioration in profitability would
also put the rating under pressure.
====================
N E W Z E A L A N D
====================
CREDIT UNION: S&P Raises ICR to 'BB+'; Outlook Negative
-------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term issuer
credit rating and financial strength rating on New Zealand insurer
Credit Union Insurance Ltd. (CUIL) to 'BB+' from 'BB'. The
outlook remains negative. At the same time, the ratings on New
Zealand Association of Credit Unions (NZACU), the ultimate parent
entity of CUIL and service provider to New Zealand-based member
credit unions and other mutuals, were affirmed at 'BB+/B', and its
outlook confirmed as negative.
"The rating action reflects our new consideration of CUIL as a
"core" operating entity of NZACU given that CUIL represents an
increasingly significant component of the overall operations of
the NZACU group. Formerly we had assessed CUIL as a "highly
strategically important" subsidiary," said credit analyst Natasha
Quirk. At June 30, 2013, CUIL represented about 52% of
consolidated group net assets and about 39% of consolidated net
profits after tax of the NZACU group. "In our view, CUIL now has
a sound track record of improved operating performance, with a
reasonably consistent earnings profile over the past two financial
years," said Ms. Quirk.
"We also believe that NZACU has demonstrated strong long-term
commitment to CUIL in recent years, including the consolidation of
its insurance operations within CUIL during 2013, with a transfer
of insurance business and a capital injection of NZ$2.0 million.
We recognise CUIL as highly integrated with NZACU from both an
operational and strategic perspective, and we consider it highly
unlikely that CUIL would be sold by NZACU."
The negative outlook mirrors that of CUIL's parent, NZACU,
reflecting the core status of CUIL to NZACU. As such, S&P expects
the ratings on CUIL to remain equalized with its ratings on NZACU,
and could be lowered or improved in line with ratings movements on
NZACU.
PIKE RIVER: Labour Promises to Pay Full Court-Ordered Compo
-----------------------------------------------------------
Vernon Small and Hamish Rutherford at Stuff.co.nz report that
Labour leader David Cunliffe has marked the third anniversary of
the Pike River mine disaster with a promise to pay the full court-
ordered compensation to the families.
"Under the Labour Government I lead, the Government will pay the
full NZ$3.4 million court-ordered compensation to the families of
the dead miners," Stuff.co.nz quotes Mr. Cunliffe as saying.
Stuf.co.nz relates that Mr. Cunliffe said his government would
then seek to recover the money from the parent companies,
shareholders and directors of Pike River Coal.
According to the report, Mr. Cunliffe said the Government had let
the families of Pike River victims down and had a moral obligation
to pay the compensation because the Department of Labour was held
jointly responsible for the tragedy which claimed the lives of 29
miners in 2010.
"It is shameful that neither the Crown, nor crown entities ACC and
NZ Super Fund, have upheld their moral obligation to contribute.
"The financial wellbeing of the Pike River families is uppermost
in our minds. Paying the court-ordered compensation is the decent
and right thing to do," Mr. Cunliffe, as cited by Stuff.co.nz,
said.
Out of the millions of dollars in insurance payments only
NZ$5,000 per miner killed found its way into the compensation for
families out of court-ordered compensation of NZ$110,000,
Mr. Cunliffe said, the report relays.
"That's reprehensible."
He said ACC, with about 5 per cent of the shares, and the NZ
Superannuation fund, with 1.6 per cent, would pay an amount
proportionate to their holdings and they would be the first phone
calls he would make, Stuf.co.nz reports.
Stuf.co.nz adds that Mr. Cunliffe said he would be surprised if
legal avenues were needed, but he left open that option as well as
a legislative change as a last resort to force payment.
"The companies' shareholders and directors have two choices. One
is the easy way, the other is the hard way."
About Pike River
Pike River Coal Limited (NZE:PRC) -- http://www.pike.co.nz/-- is
a New Zealand-based coal mining company. The Company, along with
its subsidiaries, is primarily engaged in the exploration,
evaluation, development and production of coal. It operates a
coal mine that lies under the Paparoa Ranges.
Pike River Coal Ltd was placed into receivership in December 2010
after 29 miners died in a series of explosions on Nov. 19, 2010.
New Zealand Oil & Gas, the company's largest shareholder,
appointed accountants PricewaterhouseCoopers as receivers. The
company owed NZ$80 million to secured creditors BNZ and NZ Oil &
Gas. Pike River Coal also owed another estimated NZ$10 million
to NZ$15 million to contractors, including some of the men who
lost their lives in the disaster.
Bloomberg notes that Pike River Coal was found guilty in April
this year of nine breaches of health and safety laws including
those relating to ventilation and methane management. A
New Zealand court awarded victims compensation of about NZ$110,000
each in July, adding that as the company was in receivership it
may be unable to make that payment, Bloomberg adds.
=================
S I N G A P O R E
=================
BW GROUP: Covenant Headroom Improves on Repayment, Moody's Says
---------------------------------------------------------------
Moody's Investors Service says that the headroom under BW Group's
(Ba2, ratings under review for downgrade) bank loan and bond
covenants has improved following repayment of $852 million of the
company's revolving credit facility.
Under these covenants, BW is required to maintain a collateral
pool of vessels with a market value of at least 125% of the total
outstanding amount under the respective facilities.
Based on Moody's estimates, the company now has available
unencumbered vessels to withstand a decline of 45-50% in the value
of the vessels in its existing collateral pools, up from headroom
of about 10% on October 28 2013, when Moody's placed its ratings
on review for downgrade.
"The improvement in headroom is credit positive for BW Group and
materially addresses Moody's concerns for its corporate family
rating," says Vikas Halan, a Moody's Vice President and Senior
Analyst.
The repayment of loans was achieved with proceeds from another
facility entered into by BW Gas JuJu LNG Limited, a joint venture
between BW Group and Marubeni Corp (Baa2 stable).
The new facility is a $866 million term loan facility and is
secured by the 8 LNG vessels operating in the Marubeni joint
venture. The facility is also guaranteed by BW Group.
This facility was fully drawn down by BW Gas Juju, and the
proceeds were used to repay the shareholder loan between BW Gas
Juju and BW Group. BW Group, in turn, used the proceeds from the
repayment of the shareholder loan to repay part of its secured
revolving credit facility.
"Although we consider the transaction as leverage neutral -- given
that the new loan at the joint venture has been guaranteed by BW
Group -- the company has successfully utilized the 8 LNG vessels
in the joint venture for funding the joint venture itself. This
approach has significantly improved covenant headroom," adds
Halan, who is also the lead analyst for BW Group.
"The transaction, however, increases structural subordination for
bond holders, who are now subordinated to the lenders at the joint
venture with respect to the stable cash flows of the joint
venture," adds Halan.
"We therefore continue to review the rating for downgrade, pending
the completion of the public listing of the company's liquefied
petroleum gas (LPG) business. Moody's review will focus on the new
capital structure of the company and the relative position of the
bond holders after the IPO," says Halan.
BW is in the process of publicly listing its LPG business, which
accounted for 60% of operating EBITDA for the six months ended
June 2013. The IPO was announced by BW Group in September 2013 and
is expected to complete by November 2013.
BW Group is a diversified shipping group with operations in four
key segments: LPG, tankers, liquefied natural gas (LNG), and
floating, production, storage and offloading vessels (FPSO). It
currently operates a fleet of 95 owned, part-owned or controlled
vessels. BW Group is a privately held holding company, of which
93% is owned by the Sohmen family and 7% by HSBC. BW Group owns a
49.8% stake in BW Offshore Ltd, an Oslo-listed company and the
world's second-largest FPSO owner and operator
GLOBAL A&T: S&P Puts 'B' CCR on CreditWatch Negative
----------------------------------------------------
Standard & Poor's Ratings Services said that it had placed its 'B'
long-term corporate credit rating and 'axBB-' long-term ASEAN
regional scale ratings on Global A&T Electronics Ltd. (GATE) on
CreditWatch with negative implications. At the same time, S&P
placed its 'B' issue ratings on the company's US$625 million and
US$502.257 million senior secured notes due 2019 on CreditWatch
with negative implications. GATE is an outsourced semiconductor
assembly and test services (OSAT) company that is based in
Singapore.
"We placed the ratings on CreditWatch to reflect the risk of
significant dispute-resolution costs and increased refinancing
risks following a legal notice of an "event of default." If the
claim is upheld and unresolved within the timeframe specified in
GATE's bond indenture, an acceleration of repayment may be
triggered," said Standard & Poor's credit analyst Abhishek Dangra.
A law firm has claimed that GATE violated its indenture for
completing an exchange offer for second-lien notes due 2015 and
US$502.257 million senior secured notes due 2019. However, GATE
says it completed the exchange within the terms of the indenture
and plans to contest the charges. In view of the legal
uncertainty, S&P is unable at this time to form a definitive view
on the likely outcome.
S&P understands that the trustee for the notes or 25% of holders
can call for an acceleration of payment if an event of default is
not cured within 20 days.
S&P do not anticipate that GATE's business performance or
financial strength will materially recover in the next 12 months.
In S&P's view, this will further undermine the company's
refinancing ability.
"In view of the legal uncertainty around the issue, we intend to
resolve the CreditWatch within the next three months after seeking
clarity on the likely path of the resolution for the alleged event
of default," said Mr. Dangra.
S&P may downgrade the company by more than one notch if an event
of default is triggered and appears likely to result in an
acceleration of payment.
S&P may downgrade the company by one notch if:
-- the event of default appears likely to be cured by
cancellation of the exchange of the second-lien notes, and
S&P believes the company's refinancing ability has been
impaired; or
-- the dispute-resolution costs are significant and result in
weak liquidity for the company.
S&P may revise the outlook to stable if there is no event of
default or the company cures the event of default in a timely
manner while maintaining adequate liquidity.
====================
S O U T H K O R E A
====================
HANJIN SHIPPING: Cuts Overall Operating Loss by 62% in Q3
---------------------------------------------------------
The Korea Times reports that Hanjin Shipping has managed to
weather a market slump by improving its sales and reducing
operating losses through cost-cutting efforts.
The report relates that the company said on November 17 its total
sales rose by 1.5 percent to KRW2.7 trillion in the third quarter
from a quarter ago despite a slow recovery of the global economy.
The container division achieved KRW2.2 trillion in sales, which is
a 1.4 percent increase quarter-on-quarter as container transport
volume grew by 2.1 percent. Bulk sales also increased by 1.3
percent due to a recovery in the bulk freight rate, The Korea
Times discloses.
Overall operating loss was cut by 62.4 percent on a quarter-on-
quarter basis to KRW210 billion as the terminal business achieved
an operating profit of KRW17.9 billion with productive
performances by affiliated companies, including Hanjin New Port in
Busan and the TTIA terminal in Spain, according to The Korea
Times.
The report relates that the container division recorded an
operating loss of KRW47.8 billion mainly because of oversupply in
main service routes during the peak season and delayed freight
rate recovery even though the container transport volume in Trans-
Pacific and Asia-Europe trades increased by 4.3 and 6.4 percent
year-on-year, respectively.
However, the third-quarter container operating balance improved by
34.8 percent on a quarter-on-quarter basis due to container volume
increase and fuel cost reduction, the report relays.
The Korea Times adds that the bulk division achieved a successful
turnaround with an operating profit of KRW8.9 billion, which is a
394.4 percent rise from a quarter ago as freight rates jumped by
15.6 percent.
"The container shipping market is still facing difficulties mainly
due to an oversupply. However, with the holiday season
approaching, along with continuous eco-steaming, vessel-idling,
service rationalization and rate restoration by global carriers,
container freight rates are expected to stabilize gradually," the
company projected.
"We will also concentrate on recovering freight rates with all
possible cost reduction measures in order to improve the operating
margin. As for the bulk business, the cargo volume is likely to
recover in the fourth quarter with growing demand for crops in the
U.S. and Russia as well as demand for heating and stockpiling for
the winter season."
Meanwhile, the company posted a net loss of KRW317.6 billion due
to foreign currency losses of KRW174.3 billion as a result of the
sharp appreciation of the Korean won against the dollar, The Korea
Times adds.
As reported in the Troubled Company Reporter-Asia Pacific on
Nov. 18, 2013, Bloomberg News said Hanjin Shipping Co.'s Chief
Executive Officer Kim Young Min resigned, taking responsibility
for two successive years of losses at South Korea's largest
shipper and a delay in getting financial support from creditors.
Mr. Kim, 58, will stay until a replacement is found, the Seoul-
based company said in an e-mailed statement cited by Bloomberg.
Mr. Kim was appointed as CEO in January 2009 after 20 years with
Citigroup Inc., and his term was to end in March 2015.
Bloomberg recalled that Korean Air said last month it will provide
KRW150 billion ($141 million) to Hanjin to help ease the company's
liquidity shortage. The shipping line has
KRW736.4 billion of debt and loans maturing next year, compared
with KRW58 billion in 2013, according to data compiled by
Bloomberg. Its cash and cash equivalent was KRW506.6 billion at
the end of June, Bloomberg disclosed.
Korea-based Hanjin Shipping Co., Ltd. engages in the provision of
marine transportation services. The Company mainly provides four
categories of services: container service, bulk service, terminal
service and third party logistics (3PL) service. Its container
service provides transportation of reefer cargoes, dangerous
cargoes, over-sized cargoes, industrial equipment and others. Its
bulk service provides transportation of iron ores, coals, general
merchandise, liquefied natural gas (LNG) and oil products. Its
terminal service provides logistics services with a global network
of 14 dedicated container terminals. Its 3PL service includes
freight forwarding services, contract logistics and others. The
Company also involves in the provision of ship repair yard
services.
LIG GROUP: To Sell Stake in Nonlife Insurance Unit
--------------------------------------------------
Yonhap New Agency reports that LIG Group said November 19 it plans
to sell all shares in its nonlife insurance arm in a bid to secure
cash to compensate investors for losses incurred from its 2011
financial fraud scandal.
Yonhap relates that the conglomerate said it will sell its
20.96 percent stake, or 12.5 million shares, in LIG Insurance Co.,
while the acquirer has yet to be decided. Market watchers said the
deal is estimated at KRW400 billion (US$378 million), the report
relays.
According to the report, LIG Group said that the sale of LIG
Insurance shares was inevitable, due to its need to secure cash to
compensate investors who suffered losses from bad commercial
papers (CPs), a type of short-term corporate debts, issued in
2011.
The announcement came after a court's order to compensate
investors for issuing fraudulent CPs worth around KRW215 billion,
the report notes.
Koo Cha-won, the group's chairman, was found guilty by a Seoul
court last year of orchestrating the fraudulent issuance under the
name of the group's construction arm, LIG Engineering &
Construction Co., even with prior knowledge that the firm had lost
its ability to pay back its debt and was on the verge of coming
under court receivership, Yonhap recalls.
LIG Engineering & Construction filed for receivership in 2011
after suffering financial difficulties caused by a recession in
the local construction business and growing project financing
loans.
LIG Group is a South Korean conglomerate that runs businesses
ranging from finance to construction.
=============
V I E T N A M
=============
VIETNAM TOWN: SingHaiyi Group Acquires Firm Out of Receivership
---------------------------------------------------------------
Singapore Business Review reports that Singapore property
developer SingHaiyi Group has acquired Vietnam Town, a partially
completed commercial condominium development project in San Jose,
California, which was placed under receivership, for US$33.05
million.
Acquired via a trustee's auction conducted on November 14, the
purchase is the company's second acquisition of distressed U.S.
real estate following the acquisition of Tri-County Mall in
Cincinnati, Ohio, for US$45 million in September, according to
Singapore Business Review.
The report relates that SingHaiyi said its acquisition price for
Vietnam Town of US$33.05 million includes US$29.8 million to repay
an outstanding secured debt, and the balance US$3.25 million for
the freehold project, which comprises several parcels of land on a
total site size of 853,502 sq ft.
Singapore Business Review notes that SingHaiyi intends to sell the
51 unsold units in the next one- to two-years, and use the
proceeds to construct and sell the remaining 141 units within the
next three- to five-years.
The total project outlay of US$33.05 million has been funded by
proceeds raised from a recent rights issue and share placement
exercise that was undertaken as part of the Group's strategy to
expand its real estate investment activities to the United States,
the report notes.
===============
X X X X X X X X
===============
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
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
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Information contained herein is obtained from sources believed
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TCR-AP subscription rate is US$775 for 6 months delivered via e-
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*** End of Transmission ***