/raid1/www/Hosts/bankrupt/TCRAP_Public/131128.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, November 28, 2013, Vol. 16, No. 236
Headlines
A U S T R A L I A
AUSTRALIA'S RESIDENTIAL: Ex-Director, Liquidator in Court Stoush
ENDEAVOUR HILLS: Childcare Center Goes Into Liquidation
MEDICAL REPORTS: Funding Business Up for Sale
NOBLE MINERAL: Resolute to Take Control of Ghanaian Project
RESIMAC BASTILLE: S&P Assigns Prelim. BB Rating on Class E Notes
TACHIKAWA FOREST: Workers Protest Over Redundancy Payout
C H I N A
CHINA NATURAL: Has $727K Net Income for Q3 Ended Sept. 30
RKI FINANCE (2013): S&P Rates Renminbi-Denominated Notes 'BB-'
SUNTECH POWER: Creditors Lobby for Bankruptcy in New York
SUNTECH POWER: Cayman Islands OKs Bid for Provisional Liquidation
SUNTECH POWER: Cayman Court Names PwC's Walker and Stokoe as JPLs
YINGDE GASES: Moody's Says Investment Will Not Impact Ba2 CFR
I N D I A
7 STAR COMPANY: ICRA Assigns 'BB-' Ratings to INR23cr Loans
ALUCOPANEL INDUSTRIES: CRISIL Puts BB- Ratings on INR100MM Loans
ANAND CRANKS: CRISIL Assigns 'B+' Ratings to INR70MM Loans
AVIK POLYCHEM: CRISIL Lowers Rating on INR50MM Loan to 'BB-'
BALAJI SOURCINGS: CARE Rates INR10.50cr LT Bank Loan at 'BB+'
BALLARPUR INDUSTRIES: Fitch Downgrades Long-term IDR to 'B+'
BHAGWATI CYLINDERS: CARE Assigns 'B' Rating to INR6.62cr Loans
BHARAT CARRIERS: ICRA Suspends 'BB-' Rating on INR15cr Loan
CAPITAL OVERSEAS: ICRA Reaffirms 'B' Rating on INR12.5cr Loans
CAPTAIN PIPES: CARE Revises Rating on INR6.83cr Loans to 'B'
CAPTAIN POLYPLAST: CARE Revises Rating on INR13.57cr Loans to BB
CREATIVE TRENDZ: CRISIL Cuts Ratings on INR266.1cr Loans to BB-
EASTERN PETROLEUM: CRISIL Rates INR50MM Loan at 'BB-'
FILM FARM: CRISIL Places 'BB' Ratings on INR200MM Loans
GAGAN RESOURCES: CARE Assigns 'B+' Rating to INR4cr LT Loan
GENIUS ELECTRICAL: ICRA Suspends 'B-' Rating on INR5.5cr Loan
GOOD LUCK: ICRA Suspends 'B' Rating on INR30cr Long Term Loan
HINDUSTAN ANTIBIOTICS: CRISIL Reaffirms D Ratings on INR800M Loan
HONEST ENTERPRISE: CARE Assigns 'BB-' Rating to INR16.5cr Loans
IBD NALANDA: CARE Reaffirms 'BB-' Rating on INR43.91cr Loans
INDOCHEM & POLYMERS: ICRA Ups Ratings on INR6cr Loans From 'BB'
JNV VIRA: ICRA Lowers Ratings on INR15.85cr Loans to 'D'
JUMBO FINVEST: CARE Revises Rating on INR17cr LT Loans to BB+
LGF SYSMAC: ICRA Rates INR6cr Cash Credit at 'B'
MEET ASSOCIATES: CARE Reaffirms 'BB' Rating on INR9.76cr Loans
MEET ELECTRONICS: CARE Reaffirms 'B+' Rating on INR10cr Loans
MOULI SPINNER: ICRA Reaffirms 'B+' Rating on INR3cr Loans
ORBIT ARTISANS: CARE Reaffirms 'BB' Rating on INR6.5cr Loans
ORIENTAL PLANTS: CRISIL Cuts Ratings on INR140.3MM Loans to BB+
PATWARI STEELS: CARE Assigns 'B+' Rating to INR9cr LT Bank Loans
POKARNA LTD: CRISIL Reaffirms 'D' Ratings on INR1.31BB Loans
PRASUNA VAMSIKRISHNA: CRISIL Puts BB+ Ratings on INR302.2cr Loans
RAMESHWAR COTTON: CARE Reaffirms 'B' Rating on INR7cr Loans
SANTOSHI BARRIER: CARE Reaffirms 'B+' Rating on INR4.74cr Loans
SARAL MOTORS: CRISIL Cuts Ratings on INR50MM Loans to 'BB-'
SATYANARAYAN TEA: CARE Revises Rating on INR21.79cr Loan to 'BB'
SHANTAI EXIM: ICRA Reaffirms 'B+' Rating on INR7cr LT Loan
SHIVANSH MOTORS: ICRA Assigns 'B+' Ratings to INR3cr Loans
SOMNATH COTTON: CRISIL Reaffirms 'B' Rating on INR85MM Loan
SRI BALAJI: CRISIL Assigns 'B+' Ratings to INR60MM Loans
SURYAJYOTI SPINNING: CARE Ups Rating on INR267.88cr Loans to 'C'
TECHNO FAB: CARE Reaffirms 'B' Rating on INR51.35cr LT Bank Loans
UMIYA FLEXIFOAM: CARE Reaffirms 'BB' Rating on INR0.78cr Loans
UNITED COTTON: CARE Rates INR7.58cr LT Bank Loans at 'B'
VALLABH STEELS: CRISIL Cuts Ratings on INR438MM Loans to 'BB+'
VALLABH TINPLATE: CRISIL Cuts Ratings on INR970MM Loans to 'BB'
VARDHAMAN NAGARI: CRISIL Rates INR100MM Overdraft Facility at B+
VARDHMAN INDUSTRIES: CRISIL Cuts Rating on INR1.33BB Loan to BB+
WEBSOL ENERGY: Lenders Refuse to Recast INR350cr Loan
WESTERN THOMSON: CRISIL Cuts Rating on INR141MM Loans to 'BB+'
ZEN TOBACCO: CARE Rates INR5.5cr LT Bank Loans at 'BB-'
I N D O N E S I A
MODERNLAND REALTY: Land Sale No Impact on 'B' Rating, Fitch Says
N E W Z E A L A N D
2 MOOSES: Companies Face Liquidation
BRAMWELL BOOTH: 20 Jobs Axed as Residential Care Home Closes
IRA NRG: Liquidators Still on the Hunt for Founder
LANE WALKER: Ex-Boss Jailed for Multi-million Dollar Fraud
S I N G A P O R E
PACNET LTD: Moody's Affirms CFR & $300MM Notes Rating at B2
S O U T H K O R E A
KB KOOKMIN: Regulator Mulls Suspension of Some Branches
X X X X X X X X
* S&P Puts 23 Asia-Pacific (ex-Japan) Ratings on Watch Positive
- - - - -
=================
A U S T R A L I A
=================
AUSTRALIA'S RESIDENTIAL: Ex-Director, Liquidator in Court Stoush
----------------------------------------------------------------
Chris Vedelago at The Sydney Morning Herald reports that the
fallout from the collapse of Australia's Residential Builder has
spread to the courts, with the liquidator and a former director
now embroiled in a lawsuit over the firm's debts.
According to the report, the stoush began when liquidator Hamilton
Murphy issued a statutory demand over a AUD1.31 million debt
allegedly owed by associated company ARB Developments, which is
controlled by former ARB director Robert Wiederstein.
SMH relates that Mr. Wiederstein resigned from ARB before the
company's collapse under circumstances his co-director
Graeme Varcoe found concerning in light of ARB's dire financial
position.
But Mr. Wiederstein is contesting the debt in the Supreme Court,
claiming that ARB owed his associated company at least
AUD2 million, the report states. Mr. Wiederstein's affidavit
claims ARB Developments was created to buy land to build display
homes for ARB. Mr. Wiederstein and his business partner, Raymond
De Weerd, would loan money to ARB with a "risk-fee" equivalent to
a 50 per cent interest rate on the outstanding debt, SMH relates.
After the collapse, ARB Developments filed a claim with the
liquidator that ARB still owed it AUD1.68 million, SMH discloses
citing ASIC records.
But Hamilton Murphy has dismissed the claim, calling the debt
"a contrivance and . . . unsubstantiated" in correspondence
submitted to the court, the report adds.
The Port Melbourne-based Australia's Residential Builder failed in
August, owing creditors more than AUD7.2 million. The wind-up of
the firm comes as administrator Hamilton Murphy cancelled building
contracts for 70 homes, leaving buyers scrambling to find
replacement builders, according to SMH.
ENDEAVOUR HILLS: Childcare Center Goes Into Liquidation
-------------------------------------------------------
Melissa Townsend at Berwick Leader reports that parents of
children at Endeavour Hills Early Learning Centre have been left
high and dry after the centre went into liquidation.
Documents seen by the Leader show liquidator Brendan Marchesi from
Bent & Cougle has been appointed and court action taken to wind up
the centre.
It is alleged the owner failed to pay tax and superannuation to
staff, the report says.
But while moves to shut the centre down began formally on
October 23, parents were only notified at a meeting, according to
the Leader.
According to the report, Jarna Le Boeuf, whose four-year-old
daughter attends the centre, was appalled by the way the situation
had been handled. She said parents should have been notified the
moment the director was informed about the looming closure, the
report relates.
MEDICAL REPORTS: Funding Business Up for Sale
---------------------------------------------
Cliff Sanderson at dissolve.com.au reports that expressions of
interest are sought for Medical Reports funding business in South
West Sydney. Expressions of interest should be submitted to
Cor Cordis' Jason Tang -- jtang@corcordis.com.au -- and
Ozem Kassem -- okassem@corcordis.com.au -- the business' receivers
and managers, the report says.
As advertised, the business' funding is set mainly for solicitors
based on a "no win no pay" arrangement, the report relates.
According to dissolve.com.au, the key assets of the business
include a AUD1 million per year trading revenue. Its book value
has outstanding matters funded of about AUD4 million across circa
3,000 matters.
The deadline for the submission of expressions is on Dec. 13,
2013, dissolve.com.au discloses.
Medical Reports' funding business offers arrangement and funding
services to prepare medical legal reports and evaluations from
panel specialists and doctors for compensation litigation.
NOBLE MINERAL: Resolute to Take Control of Ghanaian Project
-----------------------------------------------------------
Nick Evans at The West Australian reports that Resolute Mining has
effectively taken control of Noble Mineral Resources' Bibiani gold
mine after the collapsed company's creditors on November 26
approved Resolute's proposed deed of company arrangement.
While it is expected to take until March to complete the
transaction, Resolute will effectively take management control of
the Ghanaian project within weeks, the report says.
According to the report, the WA-based gold miner will take
responsibility for maintaining the mothballed project, and is
expected to push forward feasibilities studies on the potential
for an underground mine at the 2.8 million ounce gold project.
The West Australian notes that Resolute held about 20 per cent of
Noble's shares when it called in administrators in September. It
was owed the vast majority of the $88.7 million in convertible
note debt issued by Noble after winning a hotly contested battle
late last year for the right to recapitalise the company, the
report says.
Administrators Ferrier Hodgson said the Resolute-backed DOCA is
likely to see its Australian creditors, excluding the note
holders, receive 19.6 cents to 41.6 cents in the dollar after
proceeds from the sale of some exploration assets and Noble's
remaining AUD9 million in cash are distributed, The West
Australian reports.
Resolute will then have to work out how to return Bibiani to
production and deliver a return on its investment, the report
adds.
About Noble Mineral
Noble Mineral Resources Limited is an ASX-listed company,
exploring for and developing large-scale gold deposits in Ghana,
West Africa.
Martin Jones, Darren Weaver and Ben Johnson of Ferrier Hodgson
were appointed voluntary administrators of Noble Mineral Resources
Limited on Sept. 12, 2013, pursuant to Section 436A of the
Corporations Act 2001.
The company collapse after it was unable to pay a AUD4.8-million
debt to Rothschild Australia, relating to an AUD85-million
financing deal with Resolute, according to miningweekly.com.
RESIMAC BASTILLE: S&P Assigns Prelim. BB Rating on Class E Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to seven of the eight classes of residential mortgage-
backed securities (RMBS) to be issued by Perpetual Trustee Co.
Ltd. as trustee of RESIMAC Bastille Trust in respect of RESIMAC
Series 2013-1NC. RESIMAC Series 2013-1NC is a securitization of a
pool of nonconforming and prime residential mortgages originated
by RESIMAC Ltd.
The preliminary ratings reflect:
-- S&P's view of the credit risk of the underlying collateral
portfolio, including the fact that this is a closed
portfolio, which means no further loans will be assigned to
the trust after the closing date.
-- S&P's expectation that the various mechanisms to support
liquidity within the transaction, including principal draws
and an amortizing liquidity facility equal to 1.8% of the
initial invested amount of all notes, subject to a floor of
A$450,000 are sufficient under its stress assumptions to
support timely payment of interest on the rated notes.
-- S&P's view that the credit support is sufficient to
withstand the stresses S&P applies. This credit support
comprises mortgage insurance for 55.6% of the portfolio,
which covers 100% of the face value of those loans, their
accrued interest, and reasonable costs of enforcement; and
note subordination for the class A1, A2, B, C, D, E, and F
notes.
-- The benefit of a fixed-to-floating interest-rate swap
provided by NationalAustralia Bank Ltd. to hedge the
mismatch between receipts from any fixed-rate mortgage
loans and the variable-rate RMBS.
-- The availability of a retention amount, up to a limit of
A$1,750,000, built from excess spread and that will be
applied monthly to repay the class F notes. An equal
amount of unrated class G notes will be issued at the same
time to maintain the level of credit support available to
the rated notes.
-- The availability of an amortization amount built from
excess spread, starting two months after the call date
onward, to absorb any mortgage losses.
A copy of Standard & Poor's complete report for RESIMAC Bastille
Trust in respect of RESIMAC Series 2013-1NC can be found on
RatingsDirect, Standard & Poor's Web-based credit analysis system,
at: http://www.globalcreditportal.com
The issuer has informed Standard & Poor's (Australia) Pty Limited
that the issuer will be publically disclosing all relevant
information about the structured finance instruments that are
subject to this press release.
STANDARD & POOR'S 17G-7 DISCLOSURE REPORT
SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and a
description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities.
The Standard and Poor's 17g-7 Disclosure Report included in this
credit rating report is available at:
http://standardandpoorsdisclosure-17g7.com/2037.pdf
REGULATORY DISCLOSURES
Please refer to the initial rating report for any additional
regulatory disclosures that may apply to a transaction.
PRELIMINARY RATINGS ASSIGNED
Class Rating Amount (mil. A$)
A1 AAA (sf) 175.0
A2 AAA (sf) 38.25
B AA (sf) 14.0
C A (sf) 9.0
D BBB (sf) 5.75
E BB (sf) 3.5
F B (sf) 2.5
G N.R. 2.0
N.R.--Not rated.
TACHIKAWA FOREST: Workers Protest Over Redundancy Payout
--------------------------------------------------------
Catherine Harris at Stuff.co.nz reports that former workers from
the closed Tachikawa sawmill in Rotorua are picketing the offices
of a logging supplier which they believe is holding up their
redundancy payments.
About 120 workers lost their jobs after the mill went into
receivership late last month, the report notes.
According to the report, First Union president Syd Keepa said that
even though staff were preferential creditors, the payout had been
held up by a legal challenge from an undisclosed logging supplier,
which it believed was Hancock Forest Management.
Workers were expecting a substantial payment before Christmas in
lost wages, redundancy and holiday pay, Stuff.co.nz says.
"It is an absolute travesty that the Tachikawa workers are facing
a Christmas with no payment whatsoever, after money that the
receivers have acknowledged they are entitled to cannot be paid
because of this legal action by a forestry company," the report
quotes Mr. Keepa as saying.
Meanwhile, Stuff.co.nz reports that Company Office documents filed
in May show the Tachikawa sawmill was struggling under a net loss
of NZ$12.5 million in new and accumulated losses.
Tachikawa Forest Products (NZ) Ltd was a Rotorua, New Zealand-
based sawmill operator.
Brendon James Gibson and Grant Robert Graham of KordaMentha were
appointed Joint and Several Receivers and Managers of the assets
and undertaking of the Company on Oct. 18, 2013.
=========
C H I N A
=========
CHINA NATURAL: Has $727K Net Income for Q3 Ended Sept. 30
---------------------------------------------------------
China Natural Gas, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q, reporting a
net income of $726,763 on $32.03 million of revenues for the three
months ended Sept. 30, 2013, compared to a net loss of
$1.5 million on $31.06 million of revenues for the same period
last year.
The Company's balance sheet at Sept. 30, 2013, showed $307.5
million in total assets, $87.71 million in total liabilities, and
stockholders' equity of $219.78 million.
As of September 30, 2013, the Company had working capital deficit
of current liabilities exceeding current assets by $51,650,916 due
to the default of its senior notes payable. Its Management has
taken certain action and continues to implement changes designed
to improve the Company's financial results and operating cash
flows.
A copy of the Form 10-Q is available at:
http://is.gd/8PHvI9
About China Natural
Headquartered in Xi'an, Shaanxi Province, P.R.C., China Natural
Gas, Inc., was incorporated in the State of Delaware on March 31,
1999. The Company through its wholly owned subsidiaries and
variable interest entity, Xi'an Xilan Natural Gas Co., Ltd., and
subsidiaries of its VIE, which are located in Hong Kong, Shaanxi
Province, Henan Province and Hubei Province in the People's
Republic of China ("PRC"), engages in sales and distribution of
natural gas and gasoline to commercial, industrial and residential
customers through fueling stations and pipelines, construction of
pipeline networks, installation of natural gas fittings and parts
for end-users, and conversions of gasoline-fueled vehicles to
hybrid (natural gas/gasoline) powered vehicles at 0ptmobile
conversion sites.
On Feb. 8, 2013, an involuntary petition for bankruptcy was filed
against the Company by three of the Company's creditors, Abax
Lotus Ltd., Abax Nai Xin A Ltd., and Lake Street Fund LP (Bankr.
S.D.N.Y. Case No. 13-10419). The Petitioners claimed that they
have debts totaling $42,218,956.88 as a result of the Company's
failure to make payments on the 5% Guaranteed Senior Notes issued
in 2008. Adam P. Strochak, Esq., at Weil, Gotshal & Manges, LLP,
in Washington, D.C., represents the Petitioners as counsel.
China Natural Gas, Inc., sought dismissal of the involuntary
petition but in July 2013, it consented to the entry of an
order for relief under Chapter 11 of the U.S. Code.
The last regulatory filing listed assets as of June 30 of $29.5
million and liabilities totaling $82.5 million.
RKI FINANCE (2013): S&P Rates Renminbi-Denominated Notes 'BB-'
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' long-term
issue rating to a proposed issue of renminbi-denominated senior
unsecured notes by RKI Finance (2013) Ltd. S&P also assigned its
'cnBB+' long-term Greater China regional scale rating to the
proposed notes. RKI Finance (2013) Ltd. is a wholly owned
subsidiary of Road King Infrastructure Ltd. (BB-/Stable/--;
cnBB+/--), which will irrevocably and unconditionally guarantee
the notes on an unsubordinated and unsecured basis. The ratings
are subject to S&P's review of the final issuance documentation.
S&P expects Road King to use a substantial portion of the net
proceeds to refinance its existing debt.
The rating on Road King reflects the company's limited scale,
volatile financial performance, and weak profitability. Road
King's stable cash flows from toll road operations, disciplined
debt-funded investments, and improving liquidity position temper
the weaknesses.
S&P has equalized the issue rating to the corporate credit rating
because it believes Road King's ratio of priority debt to total
assets will remain below its notching threshold of 15% for
speculative-grade issuers.
Standard & Poor's has reviewed its ratings on Road King, which it
labeled as "under criteria observation" after publishing its
revised corporate criteria on Nov. 19, 2013. Standard & Poor's
expedited the review of its ratings on Road King because of the
company's announced debt issue. With S&P's criteria review of
Road King complete, it confirms that its ratings on this issuer
are unaffected by the criteria changes.
SUNTECH POWER: Creditors Lobby for Bankruptcy in New York
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Suntech Power Holdings Co., once the world's largest
solar-panel maker, is eligible for bankruptcy in the U.S. even
though the only nexus to North America is from selling debt,
according to Trondheim Capital Partners LP, Michael Meixler and
two other creditors who filed an involuntary bankruptcy petition
in mid-October.
According to the report, earlier this month, Suntech filed papers
asking the bankruptcy judge in Manhattan to dismiss the
bankruptcy. Suntech said that the four creditors held only 0.27
percent of outstanding debt.
Trondheim rebutted Suntech's argument that two of the four
creditors were ineligible to file an involuntary petition because
they bought the debt expressly to initiate bankruptcy.
The creditors, who say they have $1.5 million of the $541 million
in matured 3 percent senior unsecured notes, point out how Suntech
started a liquidation on Nov. 5 in the Cayman Islands. In the
process, the company admitted it is insolvent, the creditors said.
Although Suntech operates in China and is incorporated in the
Cayman Islands, the creditors contend Suntech has sufficient
contacts with the U.S. to justify a bankruptcy in New York because
the company raised at least $600 million in the U.S. debt markets.
The creditors say they were entitled to file the involuntary
petition because they "indisputably" own defaulted debt and have
judgments.
The bankruptcy judge scheduled a hearing on Dec. 12 to decide if
the involuntary bankruptcy should be dismissed.
Suntech, based in Wuxi, China, says the U.S. court should allow
the company to proceed with the bankruptcy reorganization it filed
voluntarily in the Cayman Islands.
About Suntech
Wuxi, China-based Suntech Power Holdings Co., Ltd. (NYSE: STP)
produces solar products for residential, commercial, industrial,
and utility applications. With regional headquarters in China,
Switzerland, and the United States, and gigawatt-scale
manufacturing worldwide, Suntech has delivered more than
25,000,000 photovoltaic panels to over a thousand customers in
more than 80 countries.
Suntech Power Holdings Co., Ltd., received from the trustee of its
3 percent Convertible Notes a notice of default and acceleration
relating to Suntech's non-payment of the principal amount of
US$541 million that was due to holders of the Notes on March 15,
2013. That event of default has also triggered cross-defaults
under Suntech's other outstanding debt, including its loans from
International Finance Corporation and Chinese domestic lenders.
Suntech Power had involuntary Chapter 7 bankruptcy proceedings
initiated against it on Oct. 14, 2013 in U.S. Bankruptcy Court in
White Plains, New York (Bankr. S.D.N.Y. Case No. 13-bk-13350), by
holders of more than $1.5 million of defaulted securities under a
2008 $575 million indenture. The Chapter 7 Petitioners are
Trondheim Capital Partners, L.P., Michael Meixler, Longball
Holdings, LLC, and Jiangsu Liquidators, LLC. They are represented
by Jay Teitelbaum, Esq., at Teitelbaum & Baskin LLP, in White
Plains, New York.
SUNTECH POWER: Cayman Islands OKs Bid for Provisional Liquidation
-----------------------------------------------------------------
Suntech Power Holdings Co., Ltd. (NYSE: STP), one of the world's
largest solar companies, announced early this month that the Grand
Court of the Cayman Islands, the jurisdiction of its
incorporation, has granted the Company's application for a
provisional liquidation. Restructuring professionals selected by
the Company from PricewaterhouseCoopers have been appointed to
work with the Company's Board of Directors to continue progressing
a restructuring of the Company. The restructuring professionals
will be appointed with the consent and support of the Company and
the Board of Directors with the ultimate goal of achieving the
Company's restructuring in the best interest of all stakeholders.
The restructuring professionals will commence working with the
Company immediately.
About Suntech Power
Wuxi, China-based Suntech Power Holdings Co., Ltd. (NYSE: STP)
produces solar products for residential, commercial, industrial,
and utility applications. With regional headquarters in China,
Switzerland, and the United States, and gigawatt-scale
manufacturing worldwide, Suntech has delivered more than
25,000,000 photovoltaic panels to over a thousand customers in
more than 80 countries.
Suntech Power Holdings Co., Ltd., received from the trustee of its
3 percent Convertible Notes a notice of default and acceleration
relating to Suntech's non-payment of the principal amount of
US$541 million that was due to holders of the Notes on March 15,
2013. That event of default has also triggered cross-defaults
under Suntech's other outstanding debt, including its loans from
International Finance Corporation and Chinese domestic lenders.
Suntech Power had involuntary Chapter 7 bankruptcy proceedings
initiated against it on Oct. 14, 2013 in U.S. Bankruptcy Court in
White Plains, New York (Bankr. S.D.N.Y. Case No. 13-bk-13350), by
holders of more than $1.5 million of defaulted securities under a
2008 $575 million indenture. The Chapter 7 Petitioners are
Trondheim Capital Partners, L.P., Michael Meixler, Longball
Holdings, LLC, and Jiangsu Liquidators, LLC. They are represented
by Jay Teitelbaum, Esq., at TEITELBAUM & BASKIN LLP, in White
Plains, New York.
SUNTECH POWER: Cayman Court Names PwC's Walker and Stokoe as JPLs
-----------------------------------------------------------------
PricewaterhouseCoopers, the restructuring professionals appointed
as a result of the grant of Suntech Power Holdings Co., Ltd.'s
application for a provisional liquidation, announced that on
Nov. 7, 2013, the Grand Court of the Cayman Islands appointed
David Walker -- david.walker@ky.pwc.com --
Ian Stokoe -- ian.stokoe@ky.pwc.com -- of PricewaterhouseCoopers
as joint provisional liquidators (the "JPLs") of the Company.
"The JPLs intend to work with the Suntech Power Board and its
various stakeholders to attempt to restructure Suntech Power and
its affiliated group companies.
"We refer to Suntech Power's Form 6-K filing dated July 19, 2013,
which disclosed certain transfers and disposals of the shares of
Suntech Power Japan Corporation ("Suntech Japan") and Suntech
Power Investment Pte., Ltd. ("Suntech Singapore") to Wuxi Suntech
Power Co., Ltd., purportedly made in connection with intragroup
debt restructuring (the "Purported Share Disposals")."
A copy of the Form 6-K filing dated July 19, 2013, is available
for free at http://is.gd/COdSCu
"We hereby put all relevant parties on notice that the JPLs will
investigate and pursue the Group's rights to the fullest extent in
respect of the Purported Share Disposals. Both Suntech Japan and
Suntech Singapore were owned by Power Solar System Co., Ltd.
("PSS") and PSS is an immediate subsidiary of Suntech Power. PSS
may be insolvent under the laws of the British Virgin Islands
("BVI"), the jurisdiction in which it is incorporated. As such,
the Purported Share Disposals undertaken by PSS early this year
may be voidable under BVI Law.
"The JPLs are also aware of the Hong Kong Stock Exchange
announcement made by Shunfeng Photovoltaic International Ltd. on
1 November 2013 in relation to its proposed purchase of the entire
equity interest of Wuxi Suntech by its subsidiary Jiangsu Shunfeng
Photovoltaic Technology Co., Ltd. PSS is the 100% shareholder of
Wuxi Suntech and any transfer or disposal of Wuxi Suntech's shares
requires the prior written agreement and consent of PSS. Suntech
Power has instructed the directors of PSS that they are NOT
authorised (in any way, whether directly or indirectly) to
transfer or otherwise dispose of (in any way) any assets of PSS
without the prior written approval of the JPLs. This includes any
transfer or disposal of the shares of Wuxi Suntech. As of today's
date, the JPLs have not given their approval to any transfer or
disposal of the shares of Wuxi Suntech to Jiangsu Shunfeng
Photovoltaic Technology Co., Ltd. or any other company or entity.
"The JPLs reserve all the rights against any person or entity who
may have participated in or facilitated (in any way) any transfers
or disposals of the shares of Suntech Japan, Suntech Singapore
and/or Wuxi Suntech referred to herein and any potential
subsequent transfer of those shares, including the proposed
purchase of the entire equity interest of Wuxi Suntech by Jiangsu
Shunfeng Photovoltaic Technology Co., Ltd."
About Suntech Power
Wuxi, China-based Suntech Power Holdings Co., Ltd. (NYSE: STP)
produces solar products for residential, commercial, industrial,
and utility applications. With regional headquarters in China,
Switzerland, and the United States, and gigawatt-scale
manufacturing worldwide, Suntech has delivered more than
25,000,000 photovoltaic panels to over a thousand customers in
more than 80 countries.
Suntech Power Holdings Co., Ltd., received from the trustee of its
3 percent Convertible Notes a notice of default and acceleration
relating to Suntech's non-payment of the principal amount of
US$541 million that was due to holders of the Notes on March 15,
2013. That event of default has also triggered cross-defaults
under Suntech's other outstanding debt, including its loans from
International Finance Corporation and Chinese domestic lenders.
Suntech Power had involuntary Chapter 7 bankruptcy proceedings
initiated against it on Oct. 14, 2013 in U.S. Bankruptcy Court in
White Plains, New York (Bankr. S.D.N.Y. Case No. 13-bk-13350), by
holders of more than $1.5 million of defaulted securities under a
2008 $575 million indenture. The Chapter 7 Petitioners are
Trondheim Capital Partners, L.P., Michael Meixler, Longball
Holdings, LLC, and Jiangsu Liquidators, LLC. They are represented
by Jay Teitelbaum, Esq., at TEITELBAUM & BASKIN LLP, in White
Plains, New York.
YINGDE GASES: Moody's Says Investment Will Not Impact Ba2 CFR
-------------------------------------------------------------
Moody's Investors Service says that Yingde Gases Group Company
Limited's agreement with China Coal Shaanxi (unrated) to invest in
the latter's new air separation facilities in Shaanxi Province
will not impact Yingde Gases' Ba2 corporate family and Ba3 senior
unsecured ratings.
The rating outlook is stable.
On Nov. 17, 2013, Yingde Gases announced that it had entered into
cooperation agreements with China Coal Shaanxi Yulin Energy
Chemical Company Ltd to build the facilities.
These investments -- totaling RMB1.5 billion -- will be spent over
the next 3 years. Yingde Gases will also be responsible for the
operation and management of the air separation units, its backup
units, and the air compressor station, as well supplying gas to
the project.
"Moody's expects this project to be funded by debt which will
bring Yinde Gases' adjusted debt/EBITDA ratio close to 4.8x in the
next 12 months, up from 4.3x at 30 June 2013. Such a level of debt
leverage would be close to the upper limit for the current
corporate family rating of Ba2," says Jiming Zou, a Moody's
Assistant Vice President and Analyst.
Moody's believes that Yingde Gases can handle the financial impact
from the investment, but it will face some execution risk because
the new facilities that cater to the coal chemical industry are
larger than those operated by the company at various steel mills.
On the other hand the investment offers Yingde Gas a client
relationship with China Coal, a major state-owned enterprise.
Moreover, the company will enjoy improved revenue diversification
with its entry into the chemical industry. As of June 2013, 71.4%
of the company's installed onsite oxygen capacity was for the
steel industry, which is troubled by slower growth and weak
profitability.
Moody's will continue to monitor Yingde Gases' investment
appetite. Its ratings and outlook could come under negative
pressure, if it takes on more debt-funded investment in the next
12-18 months.
=========
I N D I A
=========
7 STAR COMPANY: ICRA Assigns 'BB-' Ratings to INR23cr Loans
-----------------------------------------------------------
The rating of '[ICRA]BB-' has been assigned to the INR14.00 Cr.
proposed fund based working capital facility and INR9.00 Cr.
unallocated limits of 7 Star Company. The outlook on the long term
rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based Working 14.00 [ICRA]BB- assigned (Stable)
Capital
Unallocated 9.00 [ICRA]BB- assigned (Stable)
The assigned rating is constrained by exposure to execution risks
with the ongoing project in the intermediate stages of
construction; high funding risk with requisite external funding
still to be tied up and moderate level of customer advances as a
major proportion of cash inflow is expected to arrive at the time
of offering possession. The rating further takes into account the
exposure of firm's operations to the cyclicality inherent in the
real estate sector and dependence upon the prospect of real estate
demand in Surat region. The rating is further constrained by the
vulnerability of profitability to adverse fluctuations in the
cement and steel prices as these are procured at market rates with
no firm policy or agreements with the suppliers to hedge such
exposure. ICRA further also takes into account the risks
associated with the partnership firm of business in terms of
continuity, capital infusions and withdrawals.
The assigned rating, however favorably factors in the experience
of the partners in executing real estate projects in the past
under separate firms and the favourable location of the project.
The ratings are further supported by moderate booking levels as
more than 50% of the units have been booked.
Established in 2013, 7 Star Company is engaged in construction and
development of residential dwellings in the Surat region. The firm
has been formed as a SPV (Special Purpose Vehicle) for the
construction of a single residential project viz. 'Twilight Star'.
The project site is approximately 3 km from Udhana Railway Station
and 18 km from Surat airport. The project consists of 5 towers
with each having 12 floors (Ground +11) with a total of 120
residential units. The firm is promoted by Mr. Sunny Laheri and
Mr. Bhola Laheri and the partners have previous experience of
developing ~ 6, 20,000 sq, ft. of residential and commercial area
in seven previous projects in the Surat region.
ALUCOPANEL INDUSTRIES: CRISIL Puts BB- Ratings on INR100MM Loans
----------------------------------------------------------------
CRISIL has assigned its 'CRISIL BB-/Stable' rating to the long-
term bank facilities of Alucopanel Industries.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 70 CRISIL BB-/Stable
Proposed Long-Term
Bank Loan Facility 30 CRISIL BB-/Stable
The rating reflects Alucopanel's established marketing network
leading to diverse customer base, and its moderate financial risk
profile. These rating strengths are partially offset by
Alucopanel's constrained financial flexibility, and working-
capital-intensive and small scale of operations in the fragmented
aluminium composite panel industry.
Outlook: Stable
CRISIL believes that Alucopanel will benefit over the medium term
from its established marketing network and diverse customer base
in the aluminium panel industry. The outlook may be revised to
'Positive' if the firm's topline growth and profitability exceed
expectations, leading to significant improvement in its financial
flexibility. Conversely, the outlook may be revised to 'Negative'
if Alucopanel's order book shrinks or its financial risk profile
deteriorates owing to stretched working capital or large
additional debt-funded capital expenditure plan.
Alucopanel was incorporated in 2008 by Mr. Anil Singhal and Mr.
Ashutosh Singhal. It manufactures aluminium panel kits at its
plant in Roorkee (Uttrakhand).
ANAND CRANKS: CRISIL Assigns 'B+' Ratings to INR70MM Loans
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of Anand Cranks.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 55 CRISIL B+/Stable
Proposed Long-Term 15 CRISIL B+/Stable
Bank Loan Facility
The rating reflect AC's small and working capital intensive nature
of operations and below average financial risk profile, marked by
a weak debt protection metrics, and a small net worth base. These
rating weaknesses are partially offset by the benefits that AC
derives its promoter's extensive industry experience and financial
support from them.
Outlook: Stable
CRISIL believes that AC will maintain its business risk profile
over the medium term backed by its promoter's extensive industry
experience. The company's financial risk profile is expected to
remain constrained due to working capital intensive nature of
operations. The outlook may be revised to 'Positive' if there is
improvement in working capital management leading to better
financial flexibility along with increase in net worth.
Conversely, the outlook may be revised to 'Negative' if company's
financial risk profile deteriorates significantly because of
significant borrowings for capex or working capital requirements.
AC is a partnership firm started by Mr. Jatinder Anand and his
brother Sarvinder Singh Anand in 1995 and is in the manufacturing
of Crank Shafts, Connecting Rods, Cam Shafts and other auto parts.
The manufacturing capacities of the firm are located in Ludhiana,
Punjab.
AVIK POLYCHEM: CRISIL Lowers Rating on INR50MM Loan to 'BB-'
------------------------------------------------------------
CRISIL has downgraded its rating on Avik Polychem's long-term bank
facility to 'CRISIL BB-/Stable' from 'CRISIL BB+/Stable' while
reaffirming the rating on the short-term bank facility at 'CRISIL
A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL BB-/Stable (Downgraded
from 'CRISIL BB+/Stable')
Letter of Credit 100 CRISIL A4+ (Reaffirmed)
The rating downgrade reflects CRISIL's belief that AP's liquidity
will be weaker than expected owing to sustained pressure on
revenue and profitability combined with capital withdrawal.
Slowdown in the automobile sector, AP's key end-user industry, and
intense competition has led to revenue decline of around 10 per
cent and subsequently lower profitability during 2012-13 (refers
to financial year, April 1 to March 31). Decline in profitability,
combined with large capital withdrawal, has led to a strain on the
firm's liquidity with AP reporting negative cash accruals and
significant deterioration in its debt protection measures during
2012-13. AP's revenue and profitability are expected to remain
under pressure over the medium term led by continuing slowdown in
the automobile sector. The pressure on profitability is further
exacerbated by the high susceptibility to foreign exchange (forex)
risk owing to occasional hedging of its forex payables.
The ratings continue to reflect AP's above-average financial risk
profile, marked by a comfortable capital structure, the benefits
that the company derives from its promoters' extensive industry
experience, and the established relationship with its suppliers.
These rating strengths are partially offset by AP's modest scale
of operations in a highly fragmented industry with high end-user
industry concentration and a stretched operating cycle.
Outlook: Stable
CRISIL believes that AP will continue to benefit over the medium
term from its partners' extensive industry experience. The outlook
may be revised to 'Positive' in case of significant and sustained
improvement in the firm's scale of operations and profitability
along with efficient working capital management. Conversely, the
outlook may be revised to 'Negative' in case further deterioration
in AP's liquidity led by lower-than-expected cash accruals or
larger-than-expected working capital requirements. Any
unanticipated withdrawal of capital by the partners may also lead
to the outlook being revised to 'Negative'.
AP was set up as a partnership firm in 1988 by Mr. Nitin Joshi and
Mrs. Sadhana Joshi. The firm primarily deals in
additives/chemicals used in the formation of rubber products. AP
has an exclusive contract with 10 companies for supply in
Maharashtra (excluding Mumbai). The firm also trades in synthetic
and natural rubber and certain polymers.
BALAJI SOURCINGS: CARE Rates INR10.50cr LT Bank Loan at 'BB+'
-------------------------------------------------------------
CARE assigns 'CARE BB+' and 'CARE A4+' rating to the bank
facilities of Balaji Sourcings Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term fund-based 10.50 CARE BB+ Assigned
bank facility
(Cash Credit)
Short-term non fund-
based bank facility
(LC/BG) 32.50 CARE A4+ Assigned
Rating Rationale
The ratings assigned to the bank facilities of Balaji Sourcings
Private Limited are constrained by low profitability on account of
the trading nature of its operations, susceptibility of its
profitability margins to volatility in prices of chemicals and
highly leveraged capital structure on account of working capital
intensive nature of its operation.
The ratings favourably consider the experience of the promoters in
the chemical trading business, established relationship with the
suppliers and diversified customer profile.
BSPL' ability to effectively manage its working capital
requirements is the key rating sensitivity.
Incorporated in 2006 by Mr D Ram Reddy, Mr A Prathap Reddy and Mr
Vikas Shah, BSPL is a merchant importer of methanol and other key
chemicals used by pharmaceuticals and agrochemical industries. The
company is a part of Balaji Amies group. BSPL imports its products
from the Gulf countries, primarily from Saudi Arabia, and sells
them in India. The company has storage units in Mumbai
(Maharashtra) and Kandla (Gujarat).
Balaji Amines Ltd (BAL; Flagship Company of the group) set up in
the year 1988, is into manufacturing of methylamines,
ethylsamines, derivatives of specialty chemicals and natural
products. BAL is operating three plants with an aggregate capacity
of 1,53,000 mtpa. During FY13 (refers to the period April 1 to
March 31), BAL reported a PAT of INR31.18 crore on a total income
of INR515.51 crore as against a PAT of INR35.66 crore on a total
income of INR452.87 crore during FY12.
During FY13, BSPL reported a PAT of INR1.12 crore on a total
operating income of INR142.04 crore as against a PAT of INR0.70
crore on a total operating income of INR131.02 crore in FY12. For
H1FY14, BSPL reported a PAT of INR0.98 crore with a turnover of
INR55.77 crore.
BALLARPUR INDUSTRIES: Fitch Downgrades Long-term IDR to 'B+'
------------------------------------------------------------
Fitch Ratings has downgraded the Long-Term Issuer Default Ratings
on India-based Ballarpur Industries Limited (BILT) and its
subsidiary Ballarpur International Graphic Paper Holdings B.V
(BIGPH) to 'B+' from 'BB-'. The Outlook is Stable.
The downgrade reflects BILT's heightened debt levels. Although the
company has planned debt reduction measures, its net leverage (Net
adjusted debt/ Operating EBITDAR) is likely to remain high around
5x.
Key Rating Drivers:
High Debt Levels: The downgrade reflects weakening of BILT's
consolidated financial profile in FY13 (year ended 30 June 2013),
with its net leverage increasing to 7.0x from 5.7x in FY12.
This was primarily driven by a rise in BILT's adjusted net debt to
INR60.8bn (Fitch has applied 50% equity credit to the perpetual
debt) during FY13 from INR44.9bn a year earlier, driven by the
acquisition of captive power plants in India, the increase in its
equity stake in BIGPH and capex. The financial profile was also
hurt by BILT's weak liquidity, with cash balances declining to
INR740.2m in FY13 from INR860.1m a year earlier. However the
agency notes that the company has refinanced large part of its
debt that matures in FY14.
Fitch expects BILT's financial profile to improve, supported by
higher profitability, lower debt levels, and improved free cash
flows in the absence of any major capex. Consequently the agency
expects BILT's net leverage to improve to around 5x by FY15. BIGPH
has also announced plans to explore and evaluate various fund
raising options, including raising fresh equity capital at BIGPH
and/or its subsidiaries, which if successful, will further help
reduce BILT's debt levels.
Delay in Capex: The paper manufacturer also faced significant
delays in making capex, primarily for enhancing its pulp
capacities, in India and Malaysia. The two projects were delayed
by almost a year, with the company starting operation at its
Malaysian plant in June 2012 and the Indian facility being
completed in June 2013. The company also faced cost overruns of
INR4bn. This resulted in accrual of cost benefits to BILT at a
later date than Fitch expected.
Integrated Operations: BILT's operations are highly integrated
with captive power and pulp capacities. BILT's level of
integration in hardwood pulp is expected to increase to 100% from
around 75% currently with the completion of enhanced pulp
capacities in Malaysia and India. Fitch expects the benefits from
higher vertical integration to result in higher profitability and
improved cash flows for the company. This is likely to support
BILT's debt reduction efforts.
Strong Market Position: BILT has a strong market position in the
Indian writing and printing paper market, with large shares of the
coated paper and uncoated paper (hi-bright) segments. BILT through
its subsidiary Sabah Forest Industries Sdn. Bhd. (SFI) has
significant share in Malaysia's non-surface sized uncoated paper
sub-segment. The strong market shares are, supported by BILT's
strong brand presence and large distribution network to cater to
the fragmented paper market.
Paper Price Volatility: The volatility in paper and pulp prices
impacts the company's profitability. This is reflected in BILT's
EBITDA margins improving to 17.7% in FY13 from 16.3% in FY12
(FY11:19.1%). Although the higher level of pulp integration will
improve BILT's cost structure, the company will continue to be
impacted by volatility in paper prices.
Strategic Linkages with Subsidiaries: Fitch continues to take a
consolidated view of BILT. The agency's rating on BIGPH's
continues to reflect its strong operational and strategic linkages
with its parent, BILT. BIGPH is in the same line of business as
BILT and has common treasury and management teams. BIGPH holds a
99.99% stake in Ballarpur Graphic Paper Products Ltd. (BGPPL) and
a 97.8% stake in SFI. BIGPH contributes to about 80% of BILT's
overall revenue and about 75% to its EBITDA.
Rating Sensitivities:
Positive: A rating upgrade is unlikely in the forseeable future
because it will continue to be constrained by its high debt
levels. Future developments that may, individually or
collectively, lead to positive rating action on include:
-- Significant improvement in BILT's profitability resulting in
EBITDA margin sustained at over 20%
-- Substantial reduction in debt levels resulting in BILT's net
leverage falling below 4x on a sustained basis
-- Improvement in BILT's liquidity
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- Any weakening in performance or additional capex resulting in
BILT's net leverage exceeding 5.5x from FY15 or beyond
-- EBITDA fixed charge cover sustained at below 2x (FY13:1.84x)
-- Any weakening in liquidity
BHAGWATI CYLINDERS: CARE Assigns 'B' Rating to INR6.62cr Loans
--------------------------------------------------------------
CARE assigns 'CARE B' and CARE A4' ratings to the bank facilities
of Bhagwati Cylinders Pvt. Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 6.62 CARE B Assigned
Facilities
Short-term Bank 0.41 CARE A4 Assigned
Facilities
Rating Rationale
The ratings assigned to the bank facilities of Bhagwati Cylinders
Pvt. Ltd. are primarily constrained by its nascent stage of
operations, vulnerability of profitability to volatile raw
material prices, the leveraged capital structure in the initial
stages of operation, working capital intensive nature of
operations and highly competitive nature of the cylinders
industry.
The rating, however, favourably takes into account the experience
of the promoters in the LPG cylinders distribution business. The
ability of the company to stabilize its operations, achieve
projected scale of operations and profitability levels by securing
orders would be the key rating sensitivities.
Bhagwati Cylinders Pvt. Ltd. was incorporated in August 2010 by
the Choudhary Family belonging to Samastipur, Bihar for the
purpose of setting up a plant for manufacturing and
reconditioning of Liquefied Petroleum Gas (LPG) cylinders. The
company commenced operations from May 2013. The facilities were
setup at an aggregate cost of INR6 crore, which was financed by
the way of equity/ promoter's unsecured loans of INR1.8 crore and
debt of INR4.2 crore (at a debt-equity mix of 2.33:1). The
facilities of the company are located at Samastipur district of
Bihar with an installed capacity to produce 6 lakh cylinders per
annum.
BHARAT CARRIERS: ICRA Suspends 'BB-' Rating on INR15cr Loan
-----------------------------------------------------------
ICRA has suspended '[ICRA]BB-' rating assigned to the INR15.00
crore, fund based bank facilities and '[ICRA]A4' rating to the
INR0.50 crore non- fund based facilities of Bharat Carriers
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.
CAPITAL OVERSEAS: ICRA Reaffirms 'B' Rating on INR12.5cr Loans
--------------------------------------------------------------
ICRA has reaffirmed the long-term rating of '[ICRA]B' for the
INR12.50 crore Fund Based Limits of Capital Overseas Private
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 12.50 [ICRA]B; reaffirmed
The assigned rating continues to take into consideration the
company's moderate scale of operations, low profitability metrics
and modest debt protection indicators. The rating also factors in
the company's high working capital intensity and the intensely
competitive nature of industry which exerts pressure on operating
margins. However, the assigned rating favourably takes into
account COPL's healthy growth in operating income in FY 2013 and
continues to factor in the company's experienced management,
concentration on the export of basmati rice and the favourable
demand prospects of the rice industry with India being the second
largest producer and consumer of rice in the world.
Capital Overseas Private Limited is primarily engaged in milling
of basmati rice, with its milling unit based out of district Taran
Taran, Punjab in close proximity to the local grain market. The
company has milling and sorting capacity of 8 tons per hour, and
has a registered brand for distribution of rice in the domestic
markets.
In FY 2012-13, the company reported an operating income of
INR32.65 crore and net profit of INR0.17 crore.
CAPTAIN PIPES: CARE Revises Rating on INR6.83cr Loans to 'B'
------------------------------------------------------------
CARE revises/reaffirms the ratings assigned to the bank facilities
of Captain Pipes Private Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 6.83 CARE B Revised from
CARE B-
Short-term Bank
Facilities 1.50 CARE A4 Reaffirmed
Rating Rationale
The revision in the long-term rating assigned to the bank
facilities of Captain Pipes Pvt Ltd was on account of the increase
in its total operating income (TOI), generation of cash profits
and equity infusion in FY13 (refers to the period April 1 to March
31) resulting in an improvement in the solvency position and debt
coverage indicators.
The ratings, however, continue to remain constrained by its modest
scale of operations, short operational track record and weak
financial risk profile marked by net loss, highly leveraged
capital structure, weak liquidity and presence in a highly
fragmented industry.
The ratings, however, continue to derive strength from the
promoters' long experience in the pipe manufacturing industry and
support derived from its group company. The ability of CPPL to
increase its scale of operations along with the improvement in
profitability and capital structure would be the key rating
sensitivities.
Incorporated in 2010, Rajkot-based CPPL undertakes the business of
manufacturing high tensile unplasticized Poly Vinyl Chloride
(uPVC) pipes used for potable water (with application in the
construction and real estate sector) with an installed production
capacity of 7,500 Metric Tonnes Per Annum(MTPA). It is an
associate concern of Captain Polyplast Limited (CPL, rated CARE
BB/ CARE A4+) which is in the business of manufacturing and
trading of High Density Polyethylene (HDPE) Pipes, PVC Pipes and
also does assembling of irrigation equipment.
During FY13, CPPL reported a net loss of INR0.08 crore on a TOI of
INR30.33 crore as against a net loss of INR1.36 crore on a TOI of
INR10.54 crore in FY12. During H1FY14 (provisional), CPPL has
achieved a turnover of INR24.66 crore.
CAPTAIN POLYPLAST: CARE Revises Rating on INR13.57cr Loans to BB
----------------------------------------------------------------
CARE revises/reaffirms the rating assigned to the bank facilities
of Captain Polyplast Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 13.57 CARE BB Revised from
Facilities CARE BB-
Short-term Bank 20.00 CARE A4+ Reaffirmed
Facilities
Rating Rationale
The revision in long-term rating assigned to the bank facilities
of Captain Polyplast Ltd was on account of the consistent increase
in its total operating income (TOI) and an improvement in
profitability over the last two years ended FY13 (refers to the
period April 1 to March 31) along with the improvement in debt
coverage indicators and stable solvency and liquidity indicators.
However, the ratings continue to remain constrained by its modest
size of operations and vulnerability to changes in government
regulations. The ratings also factor the increase in the
average collection period during FY13 and an ongoing predominantly
debt-funded capex.
The ratings continue to derive strength from the vast experience
and established track record of the promoters in the agricultural
equipment industry, reputed clientele and benefits of backward
integration in Polyvinyl Chloride (PVC) pipes manufacturing and
geographical diversity.
The ability of CPL to increase its scale of operations along with
an increase in market presence, improve its profitability and
efficiently manage its working capital requirements would be the
key rating sensitivities.
CPL was established in March 1997 by Mr Ramesh Khichadia along
with two other business associates. CPL is engaged in the business
of manufacturing and trading of High-density polyethylene (HDPE)
Pipes, PVC Pipes and also assembling of irrigation equipment
including Drip Irrigation Systems, Sprinkler Irrigation Systems
and other various parts related to Micro Irrigation System (MIS).
CPL is one of the authorized and registered suppliers for MIS with
Gujarat Green Revolution Company Limited (GGRCL, a Government of
Gujarat Undertaking) for supplying MIS instruments in all the 25
districts of Gujarat. The sales to GGRCL constitute more than 90%
of the total sales. CPL has also expanded its business to
Rajasthan, Madhya Pradesh, Himachal Pradesh, Punjab, Tamil Nadu,
Delhi, Uttar Pradesh and Haryana. CPL sells its products under the
brand name of "Captain".
As on March 31, 2013, CPL had an installed capacity of 4,500
metric tonnes per annum (MTPA) of manufacturing different grades
of pipes at its sole manufacturing unit located at Shapar near
Veraval (Gujarat). CPL has a windmill with an installed capacity
of 250 KW and during FY13 it installed another windmill in
Jamnagar district with an installed capacity of 750 KW which
started its operations in May 2013.
CREATIVE TRENDZ: CRISIL Cuts Ratings on INR266.1cr Loans to BB-
---------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Creative Trendz Pvt Ltd to 'CRISIL BB-/Stable' from 'CRISIL
BB+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 80 CRISIL BB-/Stable (Downgraded
from 'CRISIL BB+/Stable')
Term Loan 186.1 CRISIL BB-/Stable (Downgraded
from 'CRISIL BB+/Stable')
The rating downgrade reflects deterioration in CTPL's liquidity
because of lengthening in its working capital cycle, marked by
stretch in realisation of receivables. The company's receivables
increased to 145 days as on March 31, 2013, from 121 days as on
March 31, 2012, because of delays in payments from customers.
Moreover, the company's debtor position weakened, with 25 per cent
of its debtors outstanding for over six months as on
March 31, 2013, vis-a-vis 11 per cent a year earlier. The delay in
realisation of receivables resulted in fully utilised bank limits
over the 12 months through September 2013, with instances of
excess drawing despite use of ad hoc limits to support liquidity.
However, the company's receivables have improved in 2013-14
(refers to financial year, April 1 to March 31), as the company
has taken measures to prune its customer base. The receivables
improved to 135 days as on September 30, 2013, with 11 per cent of
the debtors outstanding for over six months. Nevertheless, CRISIL
believes that prudent working capital management policy will
remain a key rating sensitivity factor for CTPL over the medium
term.
The rating reflects CTPL's diversified product profile, its
promoters' extensive industry experience, and its above-average
financial risk profile, marked by moderate gearing and strong debt
protection metrics. These rating strengths are partially offset by
CTPL's small scale of operations in the highly competitive textile
industry and its working-capital-intensive operations.
Outlook: Stable
CRISIL believes that CTPL will benefit over the medium term from
its promoters' extensive experience in the textile industry. The
outlook may be revised to 'Positive' if the company increases its
scale of operations while maintaining its operating margin and if
its receivables cycle improves. Conversely, the outlook may be
revised to 'Negative' if the company's working capital
requirements increase significantly or if it undertakes a larger-
than-expected debt-funded capital expenditure programme, leading
to weakening in its financial risk profile, particularly its
liquidity.
Located in Surat (Gujarat), CTPL was set up as a partnership firm
in 1996; it was reconstituted as a private limited company in
2006. The company is promoted by Mr. Ramesh Badani and Mr. Jayesh
Mistry. CTPL undertakes embroidery work on fabrics on a jobwork
basis for local traders and exporters. CTPL also has a 1.55-
megawatt windmill in Bhogat (Gujarat).
CTPL reported a profit after tax (PAT) of INR3.9 million on net
sales of INR268.1 million for 2012-13, against a PAT of INR2.4
million on net sales of INR287.4 million for 2011-12.
EASTERN PETROLEUM: CRISIL Rates INR50MM Loan at 'BB-'
-----------------------------------------------------
CRISIL has assigned its 'CRISIL BB-/Stable/CRISIL A4+' ratings to
the long-term bank facilities of Eastern Petroleum Private
Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Letter of Credit 50 CRISIL A4+
Bank Guarantee 5 CRISIL A4+
Cash Credit 50 CRISIL BB-/Stable
The ratings reflect the extensive experience of EPPL's promoters
in the industry. This rating strength is partially offset by
EPPL's modest scale of operations, susceptibility of its operating
margins to fluctuations in raw material prices and working capital
intensive nature of operations.
Outlook: Stable
CRISIL believes that EPPL will continue to benefit over the medium
term from the extensive experience of the promoter's in the
industry over the medium term. The outlook may be revised to
'Positive' if the company achieves significant and sustained
improvement in its revenues and margins, while maintaining its
debt protection metrics. Conversely, the outlook may be revised to
'Negative' in case EPPL revenues or margins decline significantly,
elongation of its working capital cycle or undertakes a larger-
than-expected debt-funded capital expenditure programme, resulting
in weakening of its financial risk profile.
EPPL, established in 1964, manufactures petroleum sulphonates,
mineral oils, automotive, industrial and marine lubricants. The
company caters to pharmaceutical and automobile industries. The
company's day to day operations are managed by Mr. Rajesh Rathi
and Mr. Pramod Rathi. The company's manufacturing facility is
located in Panvel (Maharashtra) and its registered office is in
Mumbai.
EPPL reported a profit after tax (PAT) of INR 1.9 million on net
sales of INR234.1 million for 2011-12 (refers to financial year,
April 1 to March 31), against a PAT of INR1.02 million on net
sales of INR182.1 million for 2010-11.
FILM FARM: CRISIL Places 'BB' Ratings on INR200MM Loans
-------------------------------------------------------
CRISIL has revoked the suspension of its rating on the bank
facilities of Film Farm India Private Limited and has assigned its
'CRISIL BB/Stable' rating to these facilities. CRISIL had earlier
suspended the rating of FFIPL through its rating rationale dated
April 22, 2013.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 63.5 CRISIL BB/Stable (Assigned;
Suspension Revoked)
Proposed Long-Term 136.5 CRISIL BB/Stable (Assigned;
Bank Loan Facility Suspension Revoked)
The rating reflects FFIPL's promoter's extensive experience in the
media and entertainment industry, above average financial risk
profile, marked by low gearing and healthy debt protection
metrics. These rating strengths are partially offset by
susceptibility of its revenue profile to the response to its
ongoing and future programmes and increasing working capital
intensity.
Outlook: Stable
CRISIL believes that FFIPL will maintain its business risk profile
on the back of the industry experience of its promoters. The
outlook may be revised to 'Positive' in case the company achieves
higher than expected revenue, while diversifying its revenue
profile and maintaining its capital structure. Conversely, the
outlook may be revised to 'Negative' if FFIPL faces decline in
revenues or profitability, or faces a stretch in working capital
cycle significantly impacting its financial risk profile.
FFIPL was incorporated in 2001 by Mr. Kalyan Guha and his wife
Mrs. Rupali Guha in Mumbai. The company is engaged in production
of television serials and commercial advertisements. The company
forayed into film production in 2013 and released a Marathi film -
Narbachi Wadi in September 2013. The company currently has 3 on
air shows - Uttaran on Colors, Do Dil Bandhe Ek Dori Se on Zee TV
and Aswa Sunder Swapnacha Bangala on EYV Marathi.
FFIPL reported, on provisional basis, a profit after tax of INR6.2
million on net revenues of INR 304.4 million for 2012-13 (refers
to financial year, April 1 to March 31), against a net loss of
INR3.7 million on net revenues of INR254.2 million for 2011-12.
GAGAN RESOURCES: CARE Assigns 'B+' Rating to INR4cr LT Loan
-----------------------------------------------------------
CARE assigns 'CARE B+' and 'CARE A4' ratings to the bank
facilities of Gagan Resources Pvt. Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 4 CARE B+ Assigned
Facility
Short-term Bank 4 CARE A4 Assigned
Facility
Rating Rationale
The ratings assigned to the bank facilities of Gagan Resources
Pvt. Ltd. are primarily constrained by its small scale of
operations in the highly fragmented and competitive iron & steel
industry, low profitability margins & capacity utilization,
lack of backward integration vis-…-vis volatile prices of raw
material and finished goods, high working capital intensity and
concentrated customer base as the top three account for more than
65% of the total operating income during the last three years.
The rating, however, favourably takes into account the experience
of the management in iron & steel industry and its long track
record of operation.
The ability of the company to grow its operations and improves its
profitability along with future performance of the iron and steel
industry will remain the key rating sensitivities.
Gagan Resources Pvt. Ltd. incorporated in April, 1991 by Mr Ramesh
Agarwal and Mr Suresh Agarwal of Raipur, Chhattisgarh, initially
commenced with mining activities. Subsequently in 2005, it forayed
into manufacturing of sponge iron [capacity of 30,000 Metric
Tonnes Per Annum (MTPA)] with its plant being located at Dharsiva
in Raipur, Chhattisgarh. The company, after multiple changes of
hands, in 2009, was acquired by the present promoter, Mr Anil
Agarwal & his family members to carry out the same business. Apart
from manufacturing, it is also involved in the trading activities
of iron and steel related materials.
In FY12 (refers to the period April 01 to March 31), GRPL reported
a PBILDT of INR122.3 lakh and a PAT of INR9.0 lakh on a total
operating income of INR1766.7 lakh. Furthermore, in FY13
(provisional), GRPL reported a total operating income of INR1850.0
lakh and PAT of INR24.7 lakh.
GENIUS ELECTRICAL: ICRA Suspends 'B-' Rating on INR5.5cr Loan
-------------------------------------------------------------
ICRA has suspended [ICRA]B- rating assigned to the INR5.50 Crores
fund based facilities and [ICRA]A4 rating assigned to INR1.00
Crores non fund based facilities of Genius Electrical and
Electronics 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.
GOOD LUCK: ICRA Suspends 'B' Rating on INR30cr Long Term Loan
-------------------------------------------------------------
ICRA has suspended '[ICRA]B' rating assigned to the INR30.00
crores long term fund based limits. ICRA has also suspended
'[ICRA]A4' rating assigned to the INR10.00 crores short term fund
based limits of Good Luck Capital 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.
HINDUSTAN ANTIBIOTICS: CRISIL Reaffirms D Ratings on INR800M Loan
-----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Hindustan Antibiotics
Ltd (HAL) continue to reflect instances of delay by HAL in
servicing its debt; the delays have been caused by the company's
weak liquidity amid large working capital requirements and muted
cash accruals.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long-Term 570.9 CRISIL D (Reaffirmed)
Bank Loan Facility
Proposed Short-Term 229.1 CRISIL D (Reaffirmed)
Bank Loan Facility
HAL also has a weak financial risk profile, marked by a negative
net worth and weak debt protection metrics, large working capital
requirements, and weak operating efficiency. However, the company
benefits from its long track record in the pharmaceutical
industry, and the support it receives from the Government of India
(GoI) in the form of grants and loans.
Update
HAL continues to delay servicing its term debt; as on November 13,
2013, the company has not paid its instalments for the past few
months. Additionally, HAL's cash credit account was overdrawn for
more than 30 days on multiple occasions over the 12 months through
October 2013. The delays and overdrawn limit are on account of
weak liquidity due to continuous cash losses incurred by HAL, over
the past seven years, driven by weak operating efficiency and low
utilisation levels of its manufacturing facilities. Furthermore,
HAL's working capital cycle continues to be stretched with delayed
payments from institutional customers. There have also been many
instances of devolvement in the non-fund based limits of the
company in the trailing 12 months through October 2013.
HAL, established in 1954, is a wholly owned GoI undertaking, with
a manufacturing unit in Pimpri (Maharashtra). HAL manufactures and
markets bulk drugs, mainly penicillin, streptomycin, gentamicin,
and hamycin. It has also begun manufacturing formulation products
such as injectables, capsules, tablets, liquid syrups, and large-
volume parenterals.
HONEST ENTERPRISE: CARE Assigns 'BB-' Rating to INR16.5cr Loans
---------------------------------------------------------------
CARE assigns 'CARE BB-' and 'CARE A4' ratings to the bank
facilities of Honest Enterprise Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 16.50 CARE BB- Assigned
Facilities
Short-term Bank
Facilities 22.00 CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities of Honest Enterprise
Limited are constrained by its modest albeit growing scale of
operations, its low profitability margins which are vulnerable to
volatile metal prices and foreign exchange rate, modest debt
coverage indicators and high leverage.
HEL's low bargaining power with suppliers, presence in a highly
fragmented metal trading industry and its working capital
intensive operations further constrain the ratings.
The above constraints far offset the benefits derived from the
vast experience of the promoters of HEL in the metal trading
business and augmentation of its capital base through amalgamation
of a group company.
The ability of HEL to increase its scale of operations, improve
its profitability while managing the volatility associated with
the traded goods prices and effectively managing its working
capital requirements are the key rating sensitivities.
Vadodara-based, HEL was incorporated as a private limited company
in August 1999. HEL mainly trades Stainless Steel (SS) flat
products including coils, plates, sheets, etc. HEL sources the
materials from the domestic steel manufacturers such as Jindal
Stainless Ltd, Steel Authority of India Ltd (SAIL, Salem), Shah
Alloys Ltd, etc, as well as imports the SS materials from USA,
China, Dubai, etc. HEL is also engaged in merchandise trade (Third
Country Export) and it has been awarded the 'Star Export House'
status by the Government of India (Foreign Trade Department) for
excellence in exports. HEL is also the consignment agent for BRG
Iron & Steel Co Pvt Ltd for the Gujarat region. HEL has
established its warehousing facility at Waghodia, Vadodara
(Gujarat) and finds regular demand for its products from
industrial clusters located in Gujarat.
As per the audited results for FY13 (refers to the period April 1
to March 31), HEL earned a PAT of INR0.65 crore on a total
operating income (TOI) of INR144 crore as against a PAT of INR0.06
crore on a TOI of INR113.19 crore in FY12. Furthermore, as per the
provisional results for H1FY14, it earned a PBT of INR0.21 crore
on a TOI of INR97.51 crore.
IBD NALANDA: CARE Reaffirms 'BB-' Rating on INR43.91cr Loans
------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
IBD Nalanda Infrastructure Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 43.91 CARE BB- Reaffirmed
Facilities
Rating Rationale
The rating assigned to the bank facilities of IBD Nalanda
Infrastructure Pvt Ltd continues to remain constrained on account
of project implementation and salability risk associated
with its ongoing residential real estate projects, delay in
execution and lower booking advances received in its project in
Bhopal and inherent risk associated with the real estate industry.
The rating, however, continues to favourably take into account the
promoters' experience and established track record of operations
of the IBD group in the real estate industry. The ratings also
factors completion of the project 'IBD Royal Citii Phase-I,
Jabalpur' and the launch of the new project 'IBD Royal Citii
Phase-II, Jabalpur'.
The successful completion of the projects as per schedule with
timely receipt of the envisaged booking advances and investment in
other projects would be the key rating sensitivity.
IBD Nalanda was established in October 2009 to carry out real
estate activity in Jabalpur and Bhopal region and is a part of the
IBD group. The promoters have over a decade long experience in
the construction of residential and commercial buildings.
At present IBD Nalanda is developing two residential projects
namely 'IBD Royal Citii Phase-I, Bhopal' which would house 144
units of high rise residential flats and 'IBD Royal Citii Phase-
II, Jabalpur' (New project) which would house 211 units (139
Duplex and 72 Bungalows). IBD Nalanda has received all land and
other clearances for these projects. Recently, IBD Nalanda has
completed the project named 'IBD Royal Citii Phase-I, Jabalpur'
which houses 312 units out of which it has sold 157 units and
booked 97% units for remaining units as on August 31, 2013.
As per the audited results for FY13 (refers to the period April 1
to March 31), IBD Nalanda reported a total operating income of
INR23.78 crore (FY12: INR6.79 crore) with a net profit of INR0.92
crore (FY12: INR0.31 crore).
INDOCHEM & POLYMERS: ICRA Ups Ratings on INR6cr Loans From 'BB'
---------------------------------------------------------------
ICRA has upgraded the long term rating from '[ICRA]BB' to
'[ICRA]BB+' and reaffirmed the short term rating at '[ICRA]A4+'
for the INR23.00 crore (enhanced from INR18.5 crore) bank limits
of Indochem & Polymers (the Firm or Indochem). The outlook on the
long term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund 1.50 Upgraded from [ICRA]BB
Based Limits (Stable) to [ICRA]BB+
(Stable)
Short Term Non 17.00 [ICRA]A4+ Reaffirmed
Fund Based Limits
Proposed Limits 4.50 Upgraded from [ICRA]BB
(Stable) to [ICRA]BB+
(Stable)/[ICRA]A4+
Reaffirmed
The upgrade in the long term rating factors in the improved
financial risk profile of the firm on account of substantial
growth in turnover, decline in gearing and improvement in debt
protection metrics. Nevertheless the ratings continue to be
constrained by the high business risks associated with the polymer
trading business including high competitive intensity and
fragmentation and exposure of profitability to commodity price and
forex fluctuations and the risks inherent in partnership form of
business with respect to capital infusion/withdrawals and
continuity. Nevertheless ICRA continues to favourably factor in
the positive demand outlook for commodity polymers in India; the
promoters significant experience in this line of business; upside
potential from the del credere and consignment agency business for
HPCL- Mittal Energy Limited and the Firm's fairly well established
network of relationships with suppliers and customers.
Indochem & Polymers is engaged in trading of polymers and plastic
raw materials including polyethylene (different grades- HDPE;
LDPE; LLDPE); polypropylene (PP); polyvinyl chloride (PVC) and
also deals in some speciality grades of engineering polymers and
chemicals. Indochem is constituted as a partnership firm with its
operations being headed by Mr. M.L. Bothra who has been engaged in
polymer and chemical related business since 1989 and has a fairly
good knowledge and experience in this field. The Bothra Group also
has other small to midsized entities engaged in related business.
The firm has also added to its portfolio the del credere and
consignment agency for HMEL for the distribution of its polymer
products; the revenues from this line of business are started from
January 2013.
Recent Results
In 2012-13, the Firm has reported an Operating Income (OI) of
INR66.08 crore with a Profit after tax (PAT) of INR1.33 crore as
against OI of INR39.83 crore and a PAT of INR0.57 crore in 2011-
12.
JNV VIRA: ICRA Lowers Ratings on INR15.85cr Loans to 'D'
--------------------------------------------------------
ICRA has revised the long-term rating assigned to the INR8.00
crore cash credit facility and INR0.85 crore term loan facility of
JNV Vira Engineering Private Limited to '[ICRA]D' from '[ICRA]B-'.
ICRA has also revised the short-term rating assigned to the
INR7.00 crore non-fund based limit of JVEPL to '[ICRA]D' from
'[ICRA]A4'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 8.00 Revised to [ICRA]D
from [ICRA]B-
Term loan 0.85 Revised to [ICRA]D
from [ICRA]B-
Bank Guarantee 7.00 Revised to [ICRA]D
from [ICRA]A4
The revision in ratings takes into account the weak liquidity
profile of the company with sharp increase in working capital
intensity in FY 2013, resulting in delays in term loan repayment
obligation and high utilization of working capital bank limits.
The ratings are further constrained by JVEPL's modest scale of
operations with de-growth in FY 2013; and linkage of its revenue
growth to timeliness of project execution by its large clients.
The ratings also factor in the competitive pressures from
organized as well as unorganized players and the vulnerability of
profitability to any unfavourable fluctuations in prices of key
raw materials given the fixed price nature of job work contracts.
ICRA however favourably notes the extensive experience of the
promoters in fabrication of process equipments/accessories, the
reputed customer base and the company's established relations with
the customers which assists in procuring repeat orders, and its
moderate profitability and return indicators.
Incorporated in 2007, JNV Vira Engineering Private Limited is an
engineering company engaged in the fabrication business, primarily
manufacturing process equipments/accessories for industries like
petrochemicals, power and other related industries. The major
products manufactured by the company include storage tanks, pipe
racks, building structures and other fabricated process equipment.
The company carries out its activities at a 49,000 square foot
workshop unit at Vadodara, Gujarat. JVEPL is promoted by Mr. Vinod
Shah and Mr. Jaykumar Patel.
Recent Results
During FY 2013, JVEPL reported operating income of INR23.30 crore
and profit after tax of INR1.01 crore as against an operating
income of INR29.86 crore and profit after tax of INR1.15 crore
during FY 2012.
JUMBO FINVEST: CARE Revises Rating on INR17cr LT Loans to BB+
-------------------------------------------------------------
CARE revises the rating assigned to the bank facilities of
Jumbo Finvest (India) Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 17.00 CARE BB+ Revised from
Facilities CARE BB
Rating Rationale
The revision in the rating assigned to the bank facilities of
Jumbo Finvest (India) Ltd. factors in the increase in the
proportion of its secured lending portfolio coupled with increase
in scale of operations. The rating also factors in some
diversification in the geographic and product profile of JFIL's
loan portfolio.
The rating, however, continues to be constrained by its relatively
modest scale of operations with nascent risk management systems
and high cost of operations which is however envisaged to
gradually reduce with the increase in its secured lending
portfolio.
The rating, however, continues to draw strength from the
experience of the promoter in various businesses as well as an
understanding of the local market. The rating is also supported by
good asset quality of JFIL's loan portfolio and its comfortable
capital structure.
JFIL's ability to significantly grow its scale of operations
through greater product and geographical diversification along
with strengthening of its risk management systems are the key
rating sensitivities.
JFIL was initially promoted under the name of Ajay Tractors Pvt.
Ltd. by Mr Ajay Singh and his family members in 1998 for carrying
on tractor dealership business. In 2003, its tractor dealership
business was discontinued and the company was registered as a non-
deposit taking Non-Banking Finance Company (NBFC), with Reserve
Bank of India (RBI) under its present name. The company is engaged
in agriculture and priority sector lending to economically weaker
sections of the society - primarily to industrial and mining
labourers and Small and Medium Enterprises (SMEs) in the mining
and agricultural belt of North-Eastern Rajasthan, the native place
of the promoters. As on September 30, 2013, the company had 17
operational branches which handled total loan portfolio of
INR44.26 crore.
Based on the audited financials, JFIL registered a total income of
INR9.50 crore with a PAT of INR2.82 crore in FY13 (refers to the
period April 1 to March 31) compared to total operating income of
INR6.80 crore with a PAT of INR1.24 crore in FY12. Furthermore, as
per the provisional results for H1FY14, JFIL earned a PBT of
INR1.88 crore on a total operating income of INR6.00 crore.
LGF SYSMAC: ICRA Rates INR6cr Cash Credit at 'B'
------------------------------------------------
The rating of '[ICRA]B' has been assigned to the INR6.00 crore
fund-based cash credit facility of LGF Sysmac India Private
Limited. The rating of [ICRA]A4 has also been assigned to the
INR2.00 crore short-term non-fund based facility of LSIPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 6.00 [ICRA]B assigned
Foreign Letter
of Credit 2.00 [ICRA]A4 assigned
Inland Bill
Discount/Buyer's
Credit (5.00) [ICRA]A4 assigned
The ratings factor in the small scale and low value additive
nature of the company's operations; dependence of revenues on the
demand growth from real estate sector; high inventory holding
period which, in turn, results in moderate working capital
intensity; vulnerability of profitability to adverse movements in
foreign exchange rates and fluctuations in raw material prices.
The ratings also take into account the financial profile of the
company as reflected by continuous decline in net profit and
profitability margins of the company over the last three years,
stretched capital structure and moderate coverage indicators.
The ratings, however, favourably factor in the long experience of
the promoters in the equipment and hardware industry; presence of
the company in the niche fabrication and architectural hardware
segment; favourable medium to long-term demand prospects for the
aluminium/UPVC doors, windows and composite panels and
architectural paints. ICRA also takes note of the company's
collaborations with technically sound international partners which
provide operational support and visibility and geographically
diversified well established customer base.
Incorporated in the year 2009, LGF Sysmac India Private Limited is
primarily engaged in the trading of fabrication machinery and
architectural hardware. The promoters of the company are Mr. Ashim
Chugh and Mr. Deepak Chugh who have around two decades of
experience in the construction and building industry. The company
procures machinery and hardware from its international partners
and supplies the same to its end customers i.e. architects,
builders, promoters, developers, project management consultants,
fabricators, contractors and government agencies in the domestic
market. In November 2011, LSIPL partnered with Zobel Chemie,
Germany and forayed into manufacturing of architectural paints for
UPVC profiles.
Recent Results
For the year ended March 31, 2013 (provisional unaudited
financials), LSIPL reported an operating income of INR27.63 crore
and profit after tax of Rs 0.25 crore as against an operating
income of INR25.86 crore and profit after tax of INR0.68 crore for
FY12.
MEET ASSOCIATES: CARE Reaffirms 'BB' Rating on INR9.76cr Loans
--------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Meet Associates Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 9.76 CARE BB Reaffirmed
Facilities
Short-term Bank
Facilities 2.50 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to the bank facilities of Meet Associates Pvt
Ltd continue to be constrained by its low profitability margins
and leveraged capital structure and intense competition
amongst dealers and from other brands. The ratings are further
constrained by fortunes of MAPL being linked to the performance of
the Original Equipment Manufacturer (OEM), and the subdued
domestic demand outlook of passenger vehicles.
The ratings, however, draw comfort from the experience of the
promoters in the dealership business and large product portfolio
coupled with multiple dealerships. The ratings also factor in a
significant increase in the scale of operations due to the newly
set up 3S facility.
Going forward, the ability of the company to increase its scale of
operations, improvement in the capital structure while managing
its working capital requirements would be the key rating
sensitivities.
Incorporated in year 2000 by Mr Baldev Singh, Mr Narendra Singh,
Mr Devendra Singh and Ms Manjeet Kaur, MAPL is engaged in the
business of automobile dealership. The company operates
as an authorized 3S facility (sales, spares, service) for vehicles
of Mahindra & Mahindra Ltd and Honda Motorcycle and Scooter India
Pvt Ltd (HMSI). In April 2012, the company started the
operations of its fourth dealership at Amhat, Uttar Pradesh of M&M
(low commercial vehicles & passenger vehicles). Currently, the
company has four sales and service centers in and around Uttar
Pradesh and Punjab.
During FY13, (refers to periodApril 1 to March 31) MAPL achieved a
total operating income (TOI) of INR76.83 crore with a profit after
tax (PAT) of INR0.21 crore. Till September 30, 2013, the company
achieved a total operating income (TOI) of Rs 39.82 crore.
MEET ELECTRONICS: CARE Reaffirms 'B+' Rating on INR10cr Loans
-------------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Meet Electronics Junction Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 10 CARE B+ Reaffirmed
Facilities
Rating Rationale
The rating assigned to the bank facilities of Meet Electronics
Junction Private Limited continues to remain constrained on
account of the weak financial risk profile as characterized by its
modest scale of operations with low cash accruals, leveraged
capital structure and low profitability.
Furthermore, the rating also continues to remain constrained by
the limited geographical presence in a highly competitive consumer
durables industry, limited bargaining power against principal
manufacturers and the working capital intensive nature of
operations.
The above-mentioned constraints continue to off-set the benefits
derived from the long track record of the promoters in the
distribution business, established dealer network and favourable
demand outlook of the consumer durables industry. The ratings also
factor in the increase in the total operating income and cash
accruals during FY13 (refers to April 1 to March 31).
MEJPL's ability to increase its scale of operations along with an
improvement in the financial risk profile amidst high competition
prevailing in the working capital intensive consumer durables
industry are the key rating sensitivities.
MEJPL, incorporated in March 2012, is promoted by Mr Amit Patel
and Mr Sandip Patel. MEJPL is a wholesale distributor of consumer
electronics and appliances with a presence across Ahmedabad
and Kheda district of Gujarat. During May 2012, the business of
Meet Marketing (MMG) was transferred to MEJPL. The promoters
started MMG as a sole proprietorship concern in 2001 which
had distributorship rights of Godrej & Boyce Manufacturing Company
Ltd (Godrej) and Videocon Industries Limited (Videocon) for
Ahmedabad district. It started the distributorship of LG
Electronics India Private Limited (LG) from January 2012 and
discontinued distributorship of Videocon from May 2012.
Currently, MEJPL is an exclusive distributor of LG and Godrej
consumer electronics products such as refrigerators, washing
machines, air conditioners, CTV/ LCD/LED and microwave ovens.
MEJPL has a network of more than 275 dealers & sub-dealers.
As per the audited results for FY13, MEJPL reported a PAT of
INR0.44 crore (Rs.0.35 crore in FY12) on a total operating income
of INR47.22 crore (Rs.29.35 crore in FY12).
MOULI SPINNER: ICRA Reaffirms 'B+' Rating on INR3cr Loans
---------------------------------------------------------
ICRA has re-affirmed long-term rating outstanding on the INR8.41
crore (enhanced from INR7.50 crore) term loan facilities and the
INR3.00 crore fund based facilities of Mouli Spinner Limited at
'[ICRA]B+'. ICRA has also re-affirmed short-term rating
outstanding on the INR2.50 crore non-fund based limits of MSL at
'[ICRA]A4'. For the proposed facility of INR1.09 crore, rating of
[ICRA]B+ or [ICRA]A4 would apply depending on the tenor of the
facility that is availed.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan facilities 8.41 [ICRA]B+ re-affirmed/assigned
LT-Fund based 3.00 [ICRA]B+ re-affirmed
facilities
ST-Non Fund based 2.50 [ICRA]A4 re-affirmed
Facilities
LT/ST-Unallocated 1.09 [ICRA]B+/[ICRA]A4; assigned
Facilities
The re-affirmation of the ratings factors in the gradual
improvement in the Company's financial profile (as anticipated)
driven by healthy domestic demand which has supported realizations
and improved product mix which has aided in margin growth. ICRA
also continues to factor in the experience of the promoters in the
spinning industry and their established network in the Erode
region which supports the business prospects. The ratings,
however, are constrained by the Company's modest scale of
operations and the highly commoditized nature of product which
restricts pricing flexibility to an extent. The Company's limited
bargaining power with Grasim Industries Limited, the sole supplier
of Viscose Staple Fiber (VSF), exposes it to supplier
concentration risks which could impact operations in the event of
supply disruptions and sudden price hikes. While the Company's
financial profile is sound -characterized by adequate capital
structure and debt protection metrics, the same is vulnerable to
any sharp dip in demand which could adversely impact profitability
and consequently, cash accruals. Therefore, given the annual debt
repayment obligations in excess of INR2 crore p.a. over the medium
term, ability of the Company to sustain the present level of cash
generation would be critical to meet repayment obligations in a
timely manner. Any sharp dip in demand leading to weak
realizations or sharp increase in input prices could adversely
impact the credit profile, considering the Company's small scale
of operations and limited pricing flexibility.
MSL is a small scale spinning company based out of Pallipalayam
(Erode), Tamil Nadu. MSL largely focuses in the coarser count yarn
range (20s to 40s) and markets its products to regional fabric and
hosiery manufacturers based out of Erode, Tirupur and Mumbai. The
Company has a modest capacity of 13,008 spindles and primarily
manufactures viscose cotton yarn although it has recently
diversified into the manufacture of modal yarn at a very small
scale. MSL is promoted by Mr. Paneerselvam and is currently
managed by his relative Mr. Gowrishankar. The Company commenced
operations in the year 2006.
Recent Results
The Company reported net profit of INR0.3 crore on operating
income of INR41.3 crore during the financial year 2012-13, against
net profit of INR0.1 crore on operating income of INR39.7 crore
for the financial year 2011-12.
ORBIT ARTISANS: CARE Reaffirms 'BB' Rating on INR6.5cr Loans
------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Orbit Artisans Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 6.50 CARE BB Reaffirmed
Facilities
Short-term Bank 8.20 CARE A4 Reaffirmed
Facilities
Rating Rationale
The ratings assigned to the bank facilities of Orbit Artisans
Private Limited continue to remain constrained by the modest scale
of operations, absence of price-escalation clause in its
contracts thereby exposing to raw material price fluctuation risk,
low bargaining power with the customers and its presence in the
fragmented and competitive construction industry. The ratings
also factor the customer concentration risk, moderation in its
capital structure, debt coverage indicators and liquidity position
during FY13 (refers to the period April 01 to March 31).
The above constraints continue to remain partially offset by its
experienced and technocrat promoters, its status as an approved
'AA' class government contractor, the long-standing relationship
with its key clients and a healthy order book.
Timely execution of the existing orders coupled with the ability
to grow its order book position through widening customer base and
improving profitability margin and working capital management in
the face of growing competition in the construction industry are
the key rating sensitivities.
OAPL was incorporated on August 11, 1997 and took over a
partnership firm of promoters as a going concern, which was
operational since 1993. OAPL is engaged into industrial civil and
mechanical work and construction activities. OAPL has worked for
various industries including refineries, petrochemicals, power
plants, steel plants etc and also for government bodies. OAPL is
a registered 'AA' class (highest in the scale of AA to E)
contractor from Road and Building Department (R&B), with
Government of Gujarat (GoG) and also an accredited member of the
Construction Industrial Development Council (CIDC), Delhi for the
execution of civil and mechanical works.
During FY13, OAPL reported a PAT of INR0.69 crore on a TOI of
INR23.07 crore as against a PAT of INR0.53 crore on a TOI of
INR17.19 crore in FY12.
ORIENTAL PLANTS: CRISIL Cuts Ratings on INR140.3MM Loans to BB+
---------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Oriental Plants and Equipments Pvt Ltd (OPEL; part of the OPEL
group) to 'CRISIL BB+/Stable/CRISIL A4+' from 'CRISIL BBB-
/Negative/CRISIL A3'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 10 CRISIL A4+ (Downgraded from
'CRISIL A3')
Cash Credit 65 CRISIL BB+/Stable (Downgraded
from 'CRISIL BBB-/Negative')
Letter of Credit 20 CRISIL A4+ (Downgraded from
'CRISIL A3')
Long-Term Loan 75.3 CRISIL BB+/Stable (Downgraded
from 'CRISIL BBB-/Negative')
The downgrade reflects CRISIL's expectation that the OPEL group's
operating performance will remain under pressure over the medium
term, driven by OPEL's subdued domestic revenue. The group's
operating margin is expected to remain constrained given the
increasing share of revenue from the low-margin stone-crushing
equipment business of Propel Industries Ltd (PIL; part of the OPEL
group). Consequently, the group's cash accruals are expected to be
under pressure over the medium term. The group's liquidity is
marked by modest cash accruals, high bank limit utilisation, and
significant loan obligations during 2013-14 (refers to financial
year, April 1 to March 31). CRISIL expects the OPEL group's
operational and liquidity profile to remain constrained over the
medium term.
The ratings reflect the OPEL group's moderate financial risk
profile, marked by healthy gearing and adequate debt protection
metrics, the benefits that the group derives from its promoters'
extensive industry experience, and its strong client base. These
rating strengths are partially offset by the OPEL group's
relatively small scale of operations in the intensely competitive
engineering industry, and its large working capital requirements.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of OPEL and (PIL), together referred to as
the OPEL group. This is because PIL is OPEL's fully owned
subsidiary.
Outlook: Stable
CRISIL believes that the OPEL group will continue to benefit from
its promoters' extensive industry experience over the medium term.
The outlook may be revised to 'Positive' in case of significant
improvement in the group's credit risk profile resulting from
better-than-expected cash accruals along with efficient working
capital management. Conversely, the outlook may be revised to
'Negative' in the event of pressure on the group's liquidity
resulting from lower-than-expected cash accruals or larger-than-
expected working capital requirements or debt-funded capital
expenditure.
Established in 1962 in Coimbatore (Tamil Nadu), OPEL is engaged in
the machining of various engineering components used in industries
such as automotive (auto) components, wind mills, and valves. PIL
is a fully owned subsidiary of OPEL. PIL commenced commercial
operations in 2009-10; it manufactures stone crushing equipment.
For 2012-13, the OPEL group reported a profit after tax (PAT) of
INR5.2 million on an operating income of about INR787.2 million,
against a PAT of INR20.9 million on an operating income of
INR884.0 million for 2011-12.
PATWARI STEELS: CARE Assigns 'B+' Rating to INR9cr LT Bank Loans
----------------------------------------------------------------
CARE assigns 'CARE B+' and 'CARE A4' ratings to the bank
facilities of Patwari Steels Pvt Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 9 CARE B+ Assigned
Facilities
Short-term Bank 2 CARE A4 Assigned
Facilities
Rating Rationale
The ratings assigned to the bank facilities of Patwari Steels Pvt
Ltd are constrained by its small scale of operations, lack of
backward integration vis-…-vis volatility in prices, intense
competition due to the fragmented nature of the iron & steel
industry and working capital intensive nature of operations. The
aforesaid constraints are partially offset by the rich experience
of the promoters, diverse customer base and established track
record of operations.
The ability to improve the scale of operation with an improvement
in profitability margins and capital structure would be the key
rating sensitivities.
Patwari Steels Pvt Ltd was incorporated in August 1981 by Mr
Subhash Kumar Patwari, Mr Sudhir Kumar Patwari and Mr Namit
Patwari of Patna (Bihar). The company started commercial
operations in 1993 and isengaged in the manufacturing of mild
steel (MS) ingots (capacity - 33,000 MTPA), MS bars (capacity -
16,000 MTPA) and hi-chrome balls (capacity - 5,000 MTPA) with the
plant being located at Fatwa, Patna. The facilities have quality
systems certifications of ISO 9001:2008.
PSPL belongs to the Patwari group of companies of Bihar. The other
companies of the group are Patwari Forgings Pvt Ltd and Patwari
Udyog, engaged in similar line of business.
During FY13 (refers to the period April 1 to March 31), the
company reported a PBILDT of INR0.2 crore (Rs.2.3 crore in FY12)
and a PAT of INR0.01 crore (of INR0.1 crore in FY12) on a total
income from operations of INR42.5 crore (Rs.44.3 crore in FY12).
POKARNA LTD: CRISIL Reaffirms 'D' Ratings on INR1.31BB Loans
------------------------------------------------------------
CRISIL's ratings on the bank facilities of Pokarna Ltd (Pokarna;
part of the Pokarna group) continue to reflect instances of delay
by Pokarna in servicing its debt; the delays have been caused by
the group's weak liquidity driven by its large working capital
requirements.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 292.10 CRISIL D (Reaffirmed)
Packing Credit 130.00 CRISIL D (Reaffirmed)
Letter of Credit 140.00 CRISIL D (Reaffirmed)
Foreign Documentary
Bills Purchase 170.00 CRISIL D (Reaffirmed)
Cash Credit 100.00 CRISIL D (Reaffirmed)
External Commercial 477.90 CRISIL D (Reaffirmed)
Borrowings
The Pokarna group also has a below-average financial risk profile
marked by its small net-worth, high gearing and weak debt
protection metrics, and is exposed to risks related to
fluctuations in foreign exchange rates. However, the group
benefits from its promoters' extensive experience in the granite
and apparels industries.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of Pokarna and its wholly owned
subsidiary, Pokarna Engineered Stone Ltd (PESL). This is because
both these entities, together referred to as the Pokarna group,
are under a common management, and have significant inter-company
financial transactions.
Pokarna is one of the leading exporters of granites from India,
and owns granite quarries in Andhra Pradesh and Tamil Nadu. The
company diversified into the apparel segment in 2004; it
manufactures and sells readymade garments under the brand name,
Stanza.
Pokarna also set up an engineered stone manufacturing division in
2006, which was later hived off from Pokarna Ltd into a separate
company, PESL. The technological know-how for this division was
obtained from Breton S.p.a (Italy), with which Pokarna has an
exclusive tie-up in India.
PRASUNA VAMSIKRISHNA: CRISIL Puts BB+ Ratings on INR302.2cr Loans
-----------------------------------------------------------------
CRISIL has assigned its 'CRISIL BB+/Stable/CRISIL A4+' ratings to
the bank facilities of Prasuna Vamsikrishna Spinning Mills Pvt
Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long-Term Loan 154.7 CRISIL BB+/Stable
Inland/Import
Letter of Credit 18 CRISIL A4+
Bank Guarantee 13.8 CRISIL A4+
Cash Credit 147.5 CRISIL BB+/Stable
The ratings reflect the extensive experience of PVSM's promoters
in the cotton textile industry and its above-average financial
risk profile, marked by moderate capital structure and healthy
debt protection metrics. These rating strengths are partially
offset by PVSM's modest scale of operations in the highly
fragmented cotton textile industry and susceptibility of its
operating profitability to volatility in raw material prices.
Outlook: Stable
CRISIL believes that PVSM will continue to benefit from the
extensive industry experience of its promoters in the cotton
textile industry. The outlook may be revised to 'Positive' if PVSM
improves its scale of operations while maintaining its operating
profitability, leading to an improvement in its financial risk
profile. Conversely, the outlook may be revised to 'Negative' if
there is deterioration in the company's working capital management
or if it undertakes a larger-than-expected debt-funded capital
expenditure programme or if PVSM extends significant fund support
to associate entities, thereby weakening its financial risk
profile.
Incorporated in 2004 by Mr. K Hari Babu and his family members,
PVSM is primarily engaged in the production of cotton yarn.
For 2012-13 (refers to financial year April 1 to March 31), PVSM
reported a profit after tax (PAT) of INR29.98 million on net sales
of INR584.4 million, against a PAT of INR13.34 million on net
sales of INR534.2 million for 2011-12.
RAMESHWAR COTTON: CARE Reaffirms 'B' Rating on INR7cr Loans
-----------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
Rameshwar Cotton Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 7 CARE B Reaffirmed
Facilities
The rating assigned by CARE is based on the capital deployed by
the partners and the financial strength of the firm at present.
The rating may undergo 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 Rameshwar Cotton
Industries (RCI) continues to remain constrained on account of its
modest scale of operations with weak financial risk profile
marked by thin profit margins, the leveraged capital structure and
weak debt coverage indicators.
The rating further continues to be constrained on account of its
presence in a highly fragmented cotton ginning industry with
limited value addition, volatility associated with raw material
(cotton) prices and susceptibility to adverse changes in the
government policy for cotton.
The rating continues to draw strength from the wide experience of
the partners in the cotton ginning business and locational
advantage in terms of proximity to the cotton-producing region of
Gujarat.
The ability of RCI to increase its scale of operations,
improvement in profitability while managing volatility associated
with cotton prices and moving up in the cotton value chain coupled
with an improvement in its overall financial risk profile would
remain the key rating sensitivities.
Amreli-based (Gujarat), RCI was formed in 2003 as a partnership
firm by four members of the Mashru family. RCI is engaged in
cotton ginning, pressing and oil extraction business and operates
from its sole manufacturing facilities located at Amreli with an
installed capacity of 3,500 Metric Tonne Per Annum (MTPA) of
cotton bales and 250 MTPA of oil extraction as on March 31, 2013.
As per the audited results for FY13 (refers to the period April 1
to March 31), RCI reported a PAT of INR0.01 crore (INR0.02 crore
in FY12) on a total operating income (TOI) of INR38.61 crore
(INR39.27 crore in FY12).
SANTOSHI BARRIER: CARE Reaffirms 'B+' Rating on INR4.74cr Loans
---------------------------------------------------------------
CARE reaffirms/assigns the ratings assigned to bank facilities of
Santoshi Barrier Film India Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 4.74 CARE B+ Reaffirmed
Facilities
Long-term/Short- 6.50 CARE B+/CARE A4
term Bank Reaffirmed/Assigned
Facilities
Short-term Bank 1.00 CARE A4 Assigned
Facilities
Rating Rationale
The ratings assigned to the bank facilities of Santoshi Barrier
Film India Private Limited continues to remain constrained on
account of low cash accruals, weak debt coverage indicators
and the elongated working capital cycle. The ratings further
continue to remain constrained on account of the vulnerability of
profitability to fluctuations in the raw material prices with the
SBPL's presence in the highly competitive and fragmented flexible
packaging industry.
The ratings, however, factor in an improvement in the capital
structure and profitability during FY13 (refers to the period
April 1 to March 31), coupled with the vast experience of the
promoters in the flexible packaging industry and favorable growth
prospects of the domestic packaging industry.
The ability of the company to achieve envisaged level of sales
with better capacity utilization level, along with better working
capital management and maintaining profitability in light of the
competitive industry are the key rating sensitivities.
Background Vapi-based (Gujarat) SBPL, incorporated on August 17,
2009, is promoted by Mr Dinesh Atkare and Mr Madan Atkare. SBPL is
engaged in the manufacturing of flexible packaging materials like
multilayer (seven layer) plastic films, plastic bags and plastic
tubing, which finds application in packaging of food articles,
consumer goods, pesticides, etc.
SBPL's manufacturing facility is ISO 9001:2008-certified and is
located at Nagpur with an installed capacity of 3,000 Metric
Tonnes per Annum (MTPA) as on March 31, 2013.
During FY13, SBPL reported a TOI of INR12.05 crore and PAT of
INR0.07 crore as against the TOI of INR3.53 crore and net loss of
INR0.34 crore during FY12 (refers to the period January 1 to March
31). As per the provisional results for H1FY14, SBPL reported a
total operating income of INR10.32 crore.
SARAL MOTORS: CRISIL Cuts Ratings on INR50MM Loans to 'BB-'
-----------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Saral Motors to 'CRISIL BB-/Stable' from 'CRISIL BB/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Adhoc Limit 5 CRISIL BB-/Stable (Downgraded
from 'CRISIL BB/Stable')
Cash Credit 6 CRISIL BB-/Stable (Downgraded
from 'CRISIL BB/Stable')
Proposed Term Loan 4 CRISIL BB-/Stable (Downgraded
from 'CRISIL BB/Stable')
Proposed Rupee 10 CRISIL BB-/Stable (Downgraded
Term Loan from 'CRISIL BB/Stable')
Channel Financing 25 CRISIL BB-/Stable (Downgraded
from 'CRISIL BB/Stable')
The rating downgrade factors in SM's subdued operational
performance and expected deterioration in its financial risk
profile due to debt. SM's revenue witnessed a year-on-year decline
by 19 per cent to INR393 million in 2012-13 (refers to financial
year, April 1 to March 31) and its performance in 2013-14 is also
expected to remain subdued. Though the firm's new outlet is
expected to boost revenue in 2014-15, its financial risk profile
is expected to witness substantial deterioration with gearing
increasing to about 2 times over the medium term from 1 time as on
March 31, 2013, owing to the additional debt contracted to fund
the new outlet and incremental working capital requirements.
Consequently, the firm's debt protection metrics are expected to
decline from historical levels.
The rating reflects the extensive experience of SM's partners in
the auto dealership industry and strong relationship with its
principal, VE Commercial Vehicles Ltd1 (VEL). These rating
strengths are partially offset by SM's average financial risk
profile, marked by a modest net worth, increasing gearing, and
deteriorating debt protection metrics, and exposure to intense
competition in the automotive dealership market.
Outlook: Stable
CRISIL believes that SM will continue to benefit from its
promoters extensive experience in the commercial vehicle (CV)
dealership business and strong relationship with its principal.
The outlook may be revised to 'Positive' if the firm reports
higher-than-expected sales supported by a stable operating margin,
leading to better-than-expected debt-protection metrics.
Conversely, the outlook may be revised to 'Negative' if SM reports
lower-than-expected sales, or decline in operating margin, or
deterioration in working capital cycle, or if it undertakes large
debt-funded capital expenditure programme, which will further
deteriorate its financial risk profile.
SM, established in 2004, is a partnership firm. The firm deals in
CVs of VEL. SM is based in Solapur (Maharashtra), where it has its
sole showroom-cum-workshop. SM is managed by four brothers of the
Solapur-based Ganechari family.
For 2012-13, SM reported a profit after tax (PAT) of INR2.0
million on net sales of INR392 million, against a PAT of INR3.4
million on net sales of INR487 million for 2011-12.
1VE Commercial Vehicles Ltd is a joint venture of the Volvo group
and Eicher Motors Ltd. It was established in 2009. It sells the
complete range of Eicher Motors Ltd's products and the Volvo
group's commercial vehicles.
SATYANARAYAN TEA: CARE Revises Rating on INR21.79cr Loan to 'BB'
----------------------------------------------------------------
CARE revises the ratings assigned to bank facilities of
Satyanarayan Tea Co. Pvt Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 21.79 CARE BB Revised from
Facilities CARE B
Short-term Bank 8.75 CARE A4 Reaffirmed
Facilities
Rating Rationale
The revision in ratings of Satyanarayan Tea Co. Pvt Ltd takes into
account the consistent increase in scale of operations marked by
rise in revenue & profitability levels and improvement in capital
structure as on March 31, 2013. The ratings, however, continue to
be constrained by inadequate backward integration for primary raw
material (i.e. green leaf), high leverage ratio, low
profitability margins and inherent susceptibility of the tea
industry to the vagaries of nature. The above constraints are
partially offset by the long experience of the promoters,
proximity of the unit to raw material sources, moderate capacity
utilisation with reasonable recovery rate and favorable outlook
for the tea industry. Effective management of working capital and
improvement in capital structure and enlarging scope of backward
integration are the key rating sensitivities.
STCPL was promoted by Mr. Saharia and Mr. Kanoi of Assam during
1930's and was engaged in manufacturing and trading of tea.
However, it was taken over by Kolkata based Limtex Group in
FY05 and since then, the company is under the aegis of Mr. Gopal
Poddar, the promoter-director of Limtex Group.
Over the years, the company increased its tea processing capacity,
in phases to 4 million kgpa Crush, Tear and Curl(CTC) tea.Apart
from this, STCPL is also involved inblending and trading of tea.
STCPL is a part of the Kolkata based Limtex group which started
its activities in 1977 and has interests in tea, biscuits and
information technology industry.
In FY13 (refers to the period April 1 to March 31), STCPL achieved
PAT (after deferred tax) of INR2.24 crore (Rs.1.32 crore in FY12)
on total operating income of INR121.63 crore (Rs.90.49 crore in
FY12). In H1FY14 (prov), STCPL achieved net sale of INR77.51
crore.
SHANTAI EXIM: ICRA Reaffirms 'B+' Rating on INR7cr LT Loan
----------------------------------------------------------
ICRA has reaffirmed the long-term rating of '[ICRA]B+' to the
INR7.00 crore fund-based bank facility of Shantai Exim Limited.
ICRA has also reaffirmed the short-term rating of '[ICRA]A4' to
the INR18.00 crore fund-based bank facilities of the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund 7.00 [ICRA]B+ Reaffirmed
Based Limit
Short Term Fund 18.00 [ICRA]A4 Reaffirmed
Based Limits
The ratings continue to be constrained by Shantai Exim Limited's
weak financial profile, characterized by low profit margins,
adverse capital structure, weak debt coverage indicators and high
working capital intensity of operations. The ratings also factor
in the vulnerability of profits to volatility in raw material
prices and fluctuations in the exchange rates along with the
intense competition in export markets from other domestic and
international suppliers. However, the ratings favorably factor in
the long experience of the promoters in the textile industry and
the location advantages arising from its presence in the textile
hub of Surat thus giving the company access to a large base of
suppliers.
Incorporated in 2004, Shantai Exim Limited (SEL) is engaged in the
manufacture and export of women's fashion wear, mainly sarees and
dress materials to Indonesia, Pakistan, Vietnam, Turkey, etc. The
company is also engaged in the trading of fancy yarn.The company
has its registered office and manufacturing facility at Pandesara,
Surat.
Recent results
During the financial year 2012-13, SEL registered a profit after
tax of INR1.04 crore on an operating income of INR200.42 crore
SHIVANSH MOTORS: ICRA Assigns 'B+' Ratings to INR3cr Loans
----------------------------------------------------------
ICRA has assigned the long term rating of '[ICRA]B+' for INR3.0
Crores bank facilities of Shivansh Motors Private Limited. ICRA
has a outstanding rating of [ICRA]B+ for INR7.0 Crores bank
facilities of Shivansh Motors Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 2.40 [ICRA]B+ assigned
(Cash credit)
Unallocated 0.60 [ICRA]B+ assigned
The rating reaffirmation factors in the long experience of the
promoters of Shivansh Motors Private Limited in the dealership
business as well as the fact that the company is an authorised
dealer of Hyundai Motors India Limited, the second largest OEM in
the passenger car segment in India.
The rating is, however, constrained by the company's decline in
revenues in 2012-13, thin profit margins and weak debt protection
parameters, both inherent in the dealership business. Apart from
susceptibility to slowdown in the PV segment, SMPL is also subject
to high competitive intensity, with the pressure to pass-on
discounts to end customers that limits its profitability given its
small scale of operations. The ability of SMPL to register growth
in its operating revenues, manage its working capital intensity as
well as improve its financial risk profile will remain key rating
sensitivities.
Shivansh Motors Private Limited was incorporated in 2000 and has
been operating as an authorized dealer for vehicles of Hyundai
Motors in Mandi, Himachal Pradesh since its inception. The company
deals in sale of new cars, repair and servicing of cars, buying-
refurbishing and sale of old cars. The day to day management of
the firm is taken care by Sh. Paras Gautam with support from other
directors.
Recent Results
In 2012-13, SMPL recorded an operating income of INR24 crore. The
company's operating profit before depreciation, interest and tax
stood at INR1.5 crore. The company recorded a profit of INR0.1
crore at net profit level. The total debt on the company's books
as of March 31, 2013 was INR10.9 crore.
SOMNATH COTTON: CRISIL Reaffirms 'B' Rating on INR85MM Loan
-----------------------------------------------------------
CRISIL's rating on the bank facility of Somnath Cotton Pvt Ltd
continue to reflect SCPL's weak financial risk profile marked by
high gearing and weak debt protection metrics, and its small scale
of operations in the cotton industry. These rating weaknesses are
partially offset by benefits that SCPL derives from its promoters'
extensive experience in the cotton industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 85 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that SCPL will continue to benefit from its
promoters' extensive industry experience. The outlook may be
revised to 'Positive' in case of a significant increase in SCPL's
net cash accruals leading to improvement in SCPL's debt protection
metrics and capital structure. Conversely, the outlook may be
revised to 'Negative' in case of deterioration in SCPL's financial
risk profile on account of less-than-expected profitability or if
the company undertakes any large, debt-funded capital expenditure
(capex).
Update
SCPL registered net sales of INR386.2 million in 2012-13 (refers
to financial year, April 1 to March 31) as compared to net sales
of INR322.0 million in 2011-12, in line with CRISIL's
expectations. The operating margin was marginally lower at 3.2 per
cent in 2012-13 as compared to 3.5 per cent in 2011-12. The
working capital requirements of SCPL continue to remain moderate,
as reflected in gross current assets (GCA) of 90 days in 2012-13
which primarily represents inventory. The business of the company
is seasonal in nature and the high average bank limit utilization
remains about 95 per cent in the peak season. SCPL's financial
risk profile remains constrained on account of low net worth and
high gearing of 2.1 times as on March 31, 2013; and weak debt
protection metrics with net cash accruals to total debt ratio and
interest coverage ratio at 0.03 times and 1.4 times respectively
in 2012-13. CRISIL believes that the financial risk profile will
remain weak over the medium term.
SCPL reported a profit after tax (PAT) of INR0.9 million on net
sales of INR386.2 million in 2012-13 as compared to a PAT of
INR0.2 million on net sales of INR322.0 million in 2011-12.
Incorporated in 2006, SCPL is promoted by Talaja (Gujarat)-based
Mr. Kababhai Madhabhai and his family members and friends. SCPL is
mainly engaged in ginning and pressing of cotton into bales as
well as cotton seed oil extraction.
SRI BALAJI: CRISIL Assigns 'B+' Ratings to INR60MM Loans
--------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank
facilities of Sri Balaji Industries-Visakhapatnam.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long-Term 25 CRISIL B+/Stable
Bank Loan Facility
Term Loan 35 CRISIL B+/Stable
The rating reflects SBI's modest scale operations in the intensely
competitive organic chemicals industry, its working-capital-
intensive operations, and average financial risk profile marked by
small net worth. These rating weaknesses are partially offset by
the extensive experience of SBI's promoter in the organic
chemicals industry.
Outlook: Stable
CRISIL believes that SBI will benefit from the extensive
experience of its promoter in the organic chemicals industry. The
outlook may be revised to 'Positive' if SBI increases its revenue
and profitability on a sustainable basis, leading to improvement
in its financial risk profile. Conversely, the outlook may be
revised to 'Negative' if the firm undertakes aggressive debt-
funded capital expenditure programme, or if its revenue and
profitability decline substantially, leading to deterioration in
its financial risk profile.
Established in 2011 and promoted by Mr. Subrahmanyam, SBI is a
proprietary concern engaged in distillation of solvents that are
used in manufacture of various bulk drugs.
SURYAJYOTI SPINNING: CARE Ups Rating on INR267.88cr Loans to 'C'
----------------------------------------------------------------
CARE revoked suspension and revises the ratings assigned to the
bank facilities of Suryajyoti Spinning Mills Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 267.88 CARE C Revised from
CARE D
Short-term Bank
Facilities 42.38 CARE A4 Revised from
CARE D
Rating Rationale
The revision in the ratings assigned to the bank facilities of
Suryajyoti Spinning Mills Ltd factors in the regularisation of
debt servicing post implementation of corporate debt restructuring
(CDR) package by the lenders.
The ratings continue to be constrained by the weak financial
profile of the company with high overall gearing and declining
profitability margins over the last three years period ending
March 31, 2013. The ratings are underpinned by the experienced
promoters, product diversification through presence in both cotton
and synthetic yarn and adequate availability of raw material in
the catchment area, yet to redeem the outstanding 2500 FCCB
(Foreign Currency Convertible Bond) USD1000 each got matured in
February 2012. Ability of the company to improve its financial
risk profile by rationalising the debt and ability to improve
margins will be the key rating sensitivities.
Suryajyoti Spinning Mills Ltd, promoted by Mr Ravinder Kumar
Agarwal (Managing Director), was incorporated in 1983, and
commenced operations from January 1991. SSML commenced operations
with an installed capacity of 5,040 spindles and gradually
increased it to 86,560 Spindles with its manufacturing units
located at Makthal, Burgul and Rajapur Villages of Mahabubnagar
District, AP. SSML manufactures medium to coarser counts of carded
and combed cotton yarn and various blends of synthetic yarn such
as polyester (100%), viscose (100%) and polyester-
viscose/polyester-cotton blends. SSML has set up a Fabric unit
with an installed capacity of 20 Million Meters Per Annum as an
attempt to move up the value chain which commenced in
October 2009.
For FY13 (refers to the period April 1 to March 31), SSML
registered a net loss of INR14.09 crore on a total operating
income of INR416.91 crore as against a net loss of INR10.43 crore
on a total operating income of INR402.39 crore. As per H1FY14
(unaudited) results, SSML has registered a net loss of INR4.12
crore on a total operating income of INR234.33 crore.
TECHNO FAB: CARE Reaffirms 'B' Rating on INR51.35cr LT Bank Loans
-----------------------------------------------------------------
CARE reaffirms the rating assigned to the long term bank
facilities of Techno Fab Manufacturing Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 51.35 CARE B Reaffirmed
Long/Short-term
Bank Facilities 29.00 CARE B/CARE A4 Reaffirmed
Short-term Bank
Facilities 36.50 CARE A4 Reaffirmed
Rating Rationale
The ratings assigned to Techno Fab Manufacturing Ltd. continue to
be constrained by working capital intensive nature of operations,
high overall gearing ratio, volatility in raw material prices,
moderate degree of revenue concentration and dependence on the
fortunes of steel and power sector. The ratings also factor in the
decline in revenue and profitability in FY13 (refers to the period
April 1 to March 31) and moderate order book position. The ratings
however, continue to draw strength from experience of promoters
and proven project execution capabilities. Improving profitability
amidst slowdown in the end user segment and managing working
capital effectively and raise resources to manage growth in scale
of operation are the key rating sensitivities.
TFML, promoted by the Singhania family of Kolkata, is engaged in
the fabrication and erection of mechanical and engineering
equipments like windmill tower fabrication & erection, cable tray
structure fabrication & erection, manufacturing of steel
structures and pipelines, fabrication of boiler structure,
construction & commissioning of railway line on turnkey basis,
etc, at its three manufacturing facilities at Howrah, Rourkela and
Chennai. The unit at Rourkela is under a lease agreement, while
unit at Howrah is partly owned and partly leased. Unit at Chennai
is owned by the company. The current promoters are Mr. Bihari
Saran Singhania, Mr. Priya Saran Singhania, Mr. Murari Mohan
Singhania and Mr. Gobardhan Singhania, all having about three
decades of experience in the fabrication business.
In FY13, TFML achieved PAT (after deferred tax) of INR0.05 crore
(INR4.19 crore in FY12) on total operating income of INR99.33
crore (INR139.20 crore in FY12).
UMIYA FLEXIFOAM: CARE Reaffirms 'BB' Rating on INR0.78cr Loans
--------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Umiya Flexifoam Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 0.78 CARE BB Reaffirmed
Facilities
Long-term/Short- 14.50 CARE BB/CARE A4+ Reaffirmed
term Bank
Facilities
Rating Rationale
The ratings assigned to the bank facilities of Umiya Flexifoam
Private Limited continue to remain constrained on account of its
financial risk profile characterized by the modest scale of
operations, low profit margins, moderately leveraged capital
structure and moderately weak debt coverage indicators coupled
with its presence in a highly competitive industry, vulnerability
of profit margins to fluctuation in raw material prices and
foreign exchange fluctuation risk.
The ratings, however, continues to draw strength from the wide
experience of the promoters in the Aluminium Composite Panels
(ACP) business. The ratings also factor in the increase in total
operating income and cash accruals during FY13 (refers to the
period April 1 to March 31).
UFPL's ability to increase its scale of operations, improvement in
the profit margins and capital structure along with efficient
working capital management are the key rating sensitivities.
Incorporated in November 2003, UFPL is engaged in the
manufacturing of Aluminum Composite Panel (ACP) which finds
application in the real estate industry (interior and external
designs used in high rise buildings, shopping malls, etc),
infrastructure industry and automobile industry. UFPL was promoted
by Mr Rajesh Patel and Mr Mahesh Patel. The manufacturing unit of
UFPL is located at the Sanand district in Ahmedabad with the
capacity to manufacture 12.24 lakh square meters per annum. The
finished products of UFPL are marketed under the brand name
"Flexibond".
As per the audited results for FY13, UFPL reported a PAT of
INR0.58 crore (INR0.43 crore in FY12) on a total operating income
of INR32.53 crore (INR23.72 crore in FY12). During H1FY14, UFPL
reported PBILDT of INR1.34 crore and PBT of INR0.66 crore on a
total operating income of INR19 crore.
UNITED COTTON: CARE Rates INR7.58cr LT Bank Loans at 'B'
--------------------------------------------------------
CARE assigns 'CARE B' rating to the bank facilities of United
Cotton Extract Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 7.58 CARE B Assigned
Facilities
Rating Rationale
The rating assigned to the bank facilities of United Cotton
Extract Private Limited is constrained by the relatively small
scale of operations, low capitalization, working capital intensive
nature of operations resulting in highly leveraged capital
structure and low profitability margin.
The rating is further constrained by operations in the highly
fragmented cotton ginning industry and susceptibility of operating
margins to volatile cotton prices, seasonality associated with
cotton and changes in the government policies.
These factors far offset the benefits derived from the experience
of the promoters and benefits in terms of subsidy and tax
concession.
The abilities of UCEPL to improve the scale of operations & its
profitability margins coupled with efficient management of working
capital cycle amidst the intense competition are the key rating
sensitivities.
Incorporated in 2007 by Mr Ghansham M Bafna, Mr Naseem M Yaqub and
Mr Upendra V Mehta; United Cotton Extract Private Limited started
commercial operations in November 2008 and is primarily engaged in
cotton ginning & pressing. Furthermore, since FY11 (refers to the
period April 01 to March 31), the company is also engaged in the
processing of cotton seeds to produce oil and de-oiled cake.
UCEPL's plant is located at Malegaon, Maharashtra with an
installed capacity for cotton lint -- 4,000 MTPA, process cotton
seeds of 7,000 MTPA.
During the FY13, UCEPL reported a total operating income of
INR23.56 crore (up by 7% vis-…-vis FY12) and PAT of INR0.06 crore
(down by 13% vis-a-vis FY12). Furthermore during H1FY14, the
company posted an operating income of INR3.92 crore and PBT of
INR0.06 crore.
VALLABH STEELS: CRISIL Cuts Ratings on INR438MM Loans to 'BB+'
--------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Vallabh Steels Ltd (part of the Vallabh group) to 'CRISIL
BB+/CRISIL A4+' and placed the rating on 'Rating Watch with
Developing Implications' from 'CRISIL BBB/Stable/CRISIL A3+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 405 CRISIL BB+/Watch Developing
Letter of credit
& Bank Guarantee 265 CRISIL A4+/Watch Developing
Proposed Long-Term
Bank Loan Facility 33 CRISIL BB+/Watch Developing
The rating downgrade reflects CRISIL's belief that the Vallabh
group's capital structure will remain under pressure over the
medium term, given the increased debt levels. The group's debt
increased substantially to over INR3.2 billion as on March 31,
2013, from INR2.2 billion as on March 31, 2012. The increase was
primarily because of the debt contracted to fund the capital
expenditure and to meet the group's working capital requirements.
The Vallabh group's cash accruals are expected to increase
gradually over the medium term with stabilisation of project in
Vallabh Tinplate Pvt Ltd (VTPL, rated 'CRISIL BB/Stable/CRISIL
A4+' part of the Vallabh group). However, the sluggish economic
environment, pressure on margins, and stretch in working capital
cycle, could constrain the accruals. CRISIL believes that a sharp
increase in debt obligations over the medium term will exert
pressure on the Vallabh group's liquidity; the group has debt
obligations of around INR185 million in 2013-14 (refers to
financial year, April 1 to March 31) as against INR135 million in
2012-13.
As the group is in the final stage of discussion for induction of
a strategic investor in VTPL, CRISIL has placed the ratings on
watch with developing implications. CRISIL is in discussion with
the Vallabh group's management to better understand and assess the
implications of this transaction on the group's credit risk
profile. CRISIL will remove the ratings from watch and take a
final rating action once it has clarity on these issues.
The rating reflects the Vallabh group's diversified product
profile and established market position in North India. These
rating strengths are partially offset by the group's average
financial risk profile, marked by high gearing, large working
capital requirements, and susceptibility to intense competition in
the steel industry.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of Vardhaman Industries Ltd (VIL; rated
'CRISIL BB+/CRISIL A4+/Watch Developing' part of Vallabh group),
VSL, and VTPL. The entities are collectively. This is because all
the companies, together referred to as the Vallabh group, have a
common management, integrated treasury and strong operational and
financial linkages with each other, and are in the same chain of
operations in the same industry. Apart from its core business, the
Vallabh group has investments in Vallabh Textiles Company Ltd.
Promoted by Mr. Kapil Jain, the Vallabh group is a secondary steel
producer and a manufacturer of steel and steel products. Its
operations are in North India. The group produces over 200,000
tonnes per annum (tpa) of high-value steel products. These
comprise products such as cold-rolled (CR) strips, galvanised and
black electric resistance welding steel pipes, galvanised plain
sheets (GP), galvanised corrugated sheets (GC), colour-coated
sheets, precision tubes, and steel ingots. These products are
marketed in the domestic and international markets under the
Vallabh and Oswal brands. The group has its manufacturing facility
in Ludhiana and Patiala (both in Punjab). The group's tinplate
project, undertaken under VTPL, will help it to forward integrate
its business. The total production capacity of the project is
60,000 tpa. The plant commenced commercial production from
December 2012.
For 2012-13 (refers to financial year, April 1 to March 31), the
Vallabh group reported net profit of INR48.1 million on net sales
of INR5.7 billion, as against a net profit of INR91.2 million on
net sales of INR5.1 billion for 2011-12. For the three months
ended June 30, 2013, VIL reported a net profit of INR2.8 million
on net sales of INR1.1 billion, against a net profit of INR 21.3
million on net sales of INR1.2 billion for the corresponding
period of the previous year.
VALLABH TINPLATE: CRISIL Cuts Ratings on INR970MM Loans to 'BB'
---------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Vallabh Tinplate Pvt Ltd to 'CRISIL BB/Stable' from 'CRISIL
BB+/Stable', and has assigned 'CRISIL A4+' rating on the company's
short-term bank facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 345.0 CRISIL BB/Stable (Downgraded
from 'CRISIL BB+/Stable')
Proposed Long-Term
Bank Loan Facility 61.4 CRISIL BB/Stable (Downgraded
from 'CRISIL BB+/Stable')
Long-Term Loan 563.6 CRISIL BB/Stable (Downgraded
from 'CRISIL BB+/Stable')
Bank Guarantee 40.0 CRISIL A4+ (Assigned)
The rating downgrade reflects the weakening in the VTPL's
liquidity driven by lower-than-expected revenues on account of
delays in stabilisation of the tinplate plant. VTPL commenced
commercial operations at its plant in December 2012 with a delay
of around six months resulting in lower-than-expected cash
accruals, against increasing term debt obligations. Although
VTPL's cash accruals are expected to increase gradually over the
medium term, CRISIL believes that the sharp increase in debt
obligations will exert pressure on VTPL's liquidity; it has debt
obligations of around INR85 million each for 2013-14 (refers to
financial year, April 1 to March 31) and 2014-15 as against INR25
million in 2012-13.
The rating continues to reflect the expectation of healthy
operating efficiency because of the company's integrated facility,
forward integration for operations of the Vallabh group and
limited competition in the tinplate industry. These rating
strengths are partially offset by VTPL's weak financial risk
profile, marked by high debt levels and weak debt protection
metrics.
Outlook: Stable
CRISIL believes that VTPL's credit risk profile will improve with
ramp up in volumes. The outlook may be revised to 'Positive' if
VTPL achieves larger-than-expected capacity utilisation and cash
accruals, resulting in substantial improvement in its capital
structure and debt protection metrics. Conversely, the outlook may
be revised to 'Negative' if the company's performance is lower
than expected or its debt levels exceed expectations. Also, the
rating of VTPL may be revised downwards in case of a downgrade in
the rating of Vardhaman Industries Ltd (VIL; rated 'CRISIL
BB+/CRISIL A4+/Watch Developing' part of Vallabh group).
VTPL is part of the Vallabh group, which was set up by Mr. Kapil
Kumar Jain in 1981. The group manufactures steel and steel
products through Vallabh Steel Ltd (VSL; rated 'CRISIL BB+/CRISIL
A4+/Watch Developing') and VIL, and terry towels through Vallabh
Textiles Pvt Ltd. Under VSL and VIL, the group produces about
200,000 tpa of high-value steel products that are marketed in the
domestic as well as the international market under the Oswal
brand. Vallabh group is in the final stage of discussion for
induction of a strategic investor in VTPL.
VTPL has set up an integrated facility for the manufacture of
tinplate; the total production capacity of the plant is 60,000
tpa. The land for the project is taken on lease from VIL, which is
located on the premises of the existing galvanised plain sheets
(GP)/ galvanised corrugated sheets (GC) plant of VIL in Bapror
village, Patiala (Punjab). VTPL will procure a part of Cold Rolled
Coil requirement from its group companies and forward integrate
the group's core operations. The project commenced commercial
production from December 2012.
For 2012-13, VTPL reported net profit of INR10.7 million on net
sales of INR0.96 billion.
VARDHAMAN NAGARI: CRISIL Rates INR100MM Overdraft Facility at B+
----------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facility of Vardhaman Nagari Sahakari Patsanstha Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Overdraft 100 CRISIL B+/Stable
Facility
The rating reflects Vardhaman Nagari's concentrated nature of
operations in Aurangabad and its vicinity, and exposure to risks
inherent in the cooperative societies sector. These rating
weaknesses are partially offset by the benefits that Vardhaman
Nagari derives from the healthy experience of its senior
management team.
Outlook: Stable
CRISIL believes that Vardhaman Nagari will continue to benefit
over the medium term from the healthy experience of its senior
management team. The outlook could be revised to 'Positive' if the
society diversifies its operations, or in case of any favourable
changes in regulations for cooperative societies. Conversely, the
outlook may be revised to 'Negative' if Vardhaman Nagari's
capitalisation level declines on account of significant
deterioration in asset quality and earnings profile or if there is
a relaxation in risk management practices of the society.
Vardhaman Nagari is an Aurangabad (Maharashtra) based credit co-
operative society established in July, 1993. The society operates
through 6 branches located in and around Aurangabad district. The
society offers deposit products to its members and lends to
commercial as well as retail borrowers with a sizeable presence in
renovation and repair loans. The society carries out its
operations under its current chairman, Dr. Shantilal Tajmal Singi.
As on March 31, 2013, the society had a deposit base of INR554
million and a loan book of INR387 million with a member base of
around 2900 depositors.
For 2012-13 (refers to financial year, April 1 to March 31),
Vardhaman Nagari reported a net profit of INR 9.9 million on a
total income of INR 77.5 million, against a net profit of INR7.4
million on a total income of INR59.6 million for 2011-12.
VARDHMAN INDUSTRIES: CRISIL Cuts Rating on INR1.33BB Loan to BB+
-----------------------------------------------------------------
CRISIL has downgraded its ratings on the debt programme and bank
facilities of Vardhman Industries Ltd (VIL; part of the Vallabh
group) to 'CRISIL BB+/CRISIL A4+' and placed the rating on 'Rating
Watch with Developing Implications' from 'CRISIL BBB/Stable/CRISIL
A3+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 746.5 CRISIL BB+/ Watch Developing
Letter of Credit 470.0 CRISIL A4+/ Watch Developing
Long-Term Loan 520.3 CRISIL BB+/ Watch Developing
Proposed Long-Term 63.2 CRISIL BB+/ Watch Developing
Bank Loan Facility
The rating downgrade reflects CRISIL's belief that the Vallabh
group's capital structure will remain under pressure over the
medium term, given the increased debt levels. The group's debt
increased substantially to over INR3.2 billion as on March 31,
2013, from INR2.2 billion as on March 31, 2012. The increase was
primarily because of the debt contracted to fund the capital
expenditure and to meet the group's working capital requirements.
The Vallabh group's cash accruals are expected to increase
gradually over the medium term with stabilisation of project in
Vallabh Tinplate Pvt Ltd (VTPL, rated 'CRISIL BB/Stable/CRISIL
A4+' part of the Vallabh group). However, the sluggish economic
environment, pressure on margins, and stretch in working capital
cycle, could constrain the accruals. CRISIL believes that a sharp
increase in debt obligations over the medium term will exert
pressure on the Vallabh group's liquidity; the group has debt
obligations of around INR185 million in 2013-14 (refers to
financial year, April 1 to March 31) as against INR135 million in
2012-13.
As the group is in the final stage of discussion for induction of
a strategic investor in VTPL, CRISIL has placed the ratings on
watch with developing implications. CRISIL is in discussion with
the Vallabh group's management to better understand and assess the
implications of this transaction on the group's credit risk
profile. CRISIL will remove the ratings from watch and take a
final rating action once it has clarity on these issues.
The rating reflects the Vallabh group's diversified product
profile and established market position in North India. These
rating strengths are partially offset by the group's average
financial risk profile, marked by high gearing, large working
capital requirements, and susceptibility to intense competition in
the steel industry.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of VIL, Vallabh Steel Ltd (VSL; rated
'CRISIL BB+/ CRISIL A4+/Watch Developing'), and VTPL. The entities
are collectively. This is because all the companies, together
referred to as the Vallabh group, have a common management,
integrated treasury and strong operational and financial linkages
with each other, and are in the same chain of operations in the
same industry. Apart from its core business, the Vallabh group has
investments in Vallabh Textiles Company Ltd.
Promoted by Mr. Kapil Jain, the Vallabh group is a secondary steel
producer and a manufacturer of steel and steel products. Its
operations are in North India. The group produces over 200,000
tonnes per annum (tpa) of high-value steel products. These
comprise products such as cold-rolled (CR) strips, galvanised and
black electric resistance welding steel pipes, galvanised plain
sheets (GP), galvanised corrugated sheets (GC), colour-coated
sheets, precision tubes, and steel ingots. These products are
marketed in the domestic and international markets under the
Vallabh and Oswal brands. The group has its manufacturing facility
in Ludhiana and Patiala (both in Punjab). The group's tinplate
project, undertaken under VTPL, will help it to forward integrate
its business. The total production capacity of the project is
60,000 tpa. The plant commenced commercial production from
December 2012.
For 2012-13 (refers to financial year, April 1 to March 31), the
Vallabh group reported net profit of INR48.1 million on net sales
of INR5.7 billion, as against a net profit of INR91.2 million on
net sales of INR5.1 billion for 2011-12. For the three months
ended June 30, 2013, VIL reported a net profit of INR2.8 million
on net sales of INR1.1 billion, against a net profit of INR 21.3
million on net sales of INR1.2 billion for the corresponding
period of the previous year.
WEBSOL ENERGY: Lenders Refuse to Recast INR350cr Loan
----------------------------------------------------
The Times of India reports that a consortium of seven lenders has
refused to refer the Websol Energy System to the corporate debt
restructuring (CDR) cell for the recast of its loans worth INR350
crore, said people familiar with the matter in the banking
industry.
TOI says the move assumes significance in light of the repeated
warnings by the government and the Reserve Bank of India on the
rising incidence of bad loans, prodding banks to act tough on
defaulting companies.
"Promoters weren't ready to bring in their share of contribution
to the scheme," a senior official from one of the lenders,
requesting anonymity, the report says. "They wanted to sell land
but it did not happen."
Banks had lent to the company in the form of both term credit and
working capital loans, the report notes.
Allahabad Bank has a total exposure of around INR115 crore while
Exim Bank lent about INR60 crore, the report discloses. According
to the report, the company took mostly working capital loans from
private sector lenders, including Axis Bank for about INR70 crore,
Federal Bank for about INR35 crore, INR25 crore from ICICI Bank
and around INR5 crore from HDFC Bank.
TOI notes that bankers have provided for the default and
classified it as substandard loan. During the July-September
quarter, Websol Energy extended its net loss to INR1.3 crore from
INR18.7 lakh a year ago in the same quarter, the report discloses.
According to TOI, Websol shares shrank 50% since the last one
year, closing at INR6.75 on November 25.
Kolkata, India-based Websol Energy System manufactures
photovoltaic monocrystalline solar cells and modules.
WESTERN THOMSON: CRISIL Cuts Rating on INR141MM Loans to 'BB+'
--------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank loan and
cash credit facilities of Western Thomson (India) Ltd to 'CRISIL
BB+/Stable' from 'CRISIL BBB-/ Negative'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 90 CRISIL BB+/Stable (Downgraded
from 'CRISIL BBB-/Negative')
Term Loan 51 CRISIL BB+/Stable (Downgraded
from 'CRISIL BBB-/Negative')
The rating downgrade reflects CRISIL's belief that WTIL's
liquidity will remain under pressure over the medium term with
cash accruals tightly matched with debt repayment obligations.
WTIL is undertaking a capital expenditure (capex) of around INR48
million, funded through a term debt of INR36 million and internal
accruals of INR12 million, for its capacity expansion and backward
integration. However, the capex is not expected to significantly
benefit its performance due to current slowdown in the end-user
industry. Consequently, WTIL is expected to report cash accruals
of INR22 million for 2014-15 (refers to financial year, April 1 to
March 31) which are tightly matched with its debt obligations of
INR21 million during the year.
CRISIL's rating on the bank facilities of WTIL continues to
reflect the company's established position in the thermostat
segment for the automobile industry in India, and moderate
financial risk profile, marked by comfortable gearing, albeit
constrained by a small net worth. These rating strengths are
partially offset by WTIL's susceptibility to volatility in raw
material prices, and significant customer concentration.
Outlook: Stable
CRISIL believes that WTIL will benefit from the extensive
experience of its promoters over the medium term. The outlook may
be revised to 'Positive' if the company's liquidity improves due
to larger-than-expected net cash accruals along with efficient
working capital management. Conversely, the outlook may be revised
to 'Negative' in case the company undertakes any larger-than-
expected capex programme or it faces stretch in working capital
cycle resulting in weak financial risk profile.
WTIL manufactures thermostats for the automotive industry. The
company was set up by Mr. Venkatachalam Chidambaram and family,
and Magal Engineering Ltd, UK (Magal Engineering), in 1967. It is
based in Chennai (Tamilnadu).
ZEN TOBACCO: CARE Rates INR5.5cr LT Bank Loans at 'BB-'
-------------------------------------------------------
CARE assigns 'CARE BB-' rating to the bank facilities of Zen
Tobacco Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 5.50 CARE BB- Assigned
Facilities
Rating Rationale
The rating assigned to the bank facilities of Zen Tobacco Private
Limited is primarily constrained on account of its modest scale of
operations and its financial risk profile marked by a
steady growth in total operating income, moderate profitability
and moderately weak debt coverage indicators coupled with working
capital intensive nature of operations. The rating is
further constrained due to the susceptibility of business
operations to adverse changes in government regulations and
seasonality associated with the raw material availability and
susceptibility of its profitability to volatility in raw materials
prices.
The rating, however, derives strength from the established
operational track record of over a decade and the vast experience
of the promoters in the tobacco industry, established sourcing
arrangements with tobacco vendors for the procurement of raw
materials and wide distribution network for its products.
Increase in the scale of operations along with an improvement in
profitability while mitigating the fluctuation in raw material
prices and better working capital management would be the key
rating sensitivities.
Ahmedabad-based (Gujarat) ZTPL was established in the year 2003.
The main product of ZTPL is chewing tobacco (Zarda). Mr Rashmin
Manjithia, managing director, manages the day-to-day
operations of ZTPL. The company markets its products under the
brand 'Mazaa', 'Hero' and 'Eagle' across India. Its plant, located
at Ahmedabad, had a total installed capacity of 1,400 Metric
Tonnes per Annum (MTPA) of chewing tobacco as on March 31, 2013.
During FY13 (refers to the period April 1 to March 31), ZTPL
reported a total operating income of INR32.54 crore (FY12:
INR28.01 crore) and profit after tax of INR0.98 crore (FY12:
INR0.63 crore).
During H1FY14 (provisional), ZTPL has achieved total sales (net of
excise) amounting to INR12.98 crore.
=================
I N D O N E S I A
=================
MODERNLAND REALTY: Land Sale No Impact on 'B' Rating, Fitch Says
-----------------------------------------------------------------
Fitch Ratings says that PT Modernland Realty Tbk's (B/Stable) sale
of land at its Jakarta Garden City project to PT Aeon Mall
Indonesia is positive for home sales at the project, although
there is no impact on the Indonesian property developer's rating.
On 22 November 2013, Modernland formalized the sale of 8.5
hectares of land at Jakarta Garden City to PT Aeon Mall Indonesia,
a subsidiary of Aeon Mall Co Ltd (Aeon, unrated), for USD45.7m.
Aeon plans to develop on the site its third shopping mall in the
country with 210,000 sqm of retail space.
The shopping mall will be a strong selling point for homes at
Jakarta Garden City. Timely execution of the mall will, to some
extent, also moderate Fitch's concern over the execution risk for
Jakarta Garden City after Modernland buys out Singapore-based
Keppel Land's share in the project.
Fitch did not incorporate the sale of land to Aeon into the rating
case when the agency assigned the rating to Modernland in July
2013 because there was no definite agreement on the sale at that
time.
If the land sale to Aeon is incorporated into the 2013 forecasts,
Fitch estimates Modernland's financial metrics - characterized by
presales/gross debt of about 30% - will remain appropriate for its
current rating. Cash flows from the land sale to Aeon would offset
the lower than expected presales at Modernland's industrial
estate, Modern Cikande, given the slower investment climate in
2H13. Fitch expects Modernland to book presales at about IDR2trn
for 2013, unchanged from its previous expectation.
Modernland's projects are concentrated in Greater Jakarta. It is
developing residential township and industrial estates in Cakung
and Cikande, both close to the capital.
====================
N E W Z E A L A N D
====================
2 MOOSES: Companies Face Liquidation
------------------------------------
Hamish McNeilly at The Otago Daily Times reports that Benjamin
Hanssen, a former bankrupt turned Dunedin bar owner, is facing the
liquidation of several hospitality companies.
Mr. Hanssen is recorded as a director of 2 Mooses Tavern Ltd and a
director and shareholder of The Church Nightclub Ltd, ODT
discloses.
The report says Inland Revenue confirmed civil proceedings had
been filed against both companies, but declined to release details
of the cases, citing confidentiality.
Dunedin police have confirmed matters relating to Mr. Hanssen "are
with the CIB for investigation, the report notes.
ODT notes that Mr. Hanssen, and his partner Kerry Thompson, have
business interests in Dunedin bars Metro, Monkey Bar, Diamond
Lounge/Rumours and the Clarendon Hotel.
The report says the liquidation proceedings against the two
companies are believed to involve the Diamond Lounge and the
Monkey Bar.
The Moray Pl-based Diamond Lounge used to trade as the 2 Mooses
Tavern before it was converted into an adult entertainment venue,
and includes a bar called Rumours.
Rumours has not traded for months, while Diamond Lounge has been
shut for several weeks, as has the student-oriented nightclub
Monkey Bar, The Otago Daily Times says.
BRAMWELL BOOTH: 20 Jobs Axed as Residential Care Home Closes
------------------------------------------------------------
Esther Ashby-Coventry at Stuff.co.nz reports that about 20
permanent staff are being made redundant with the closure of
Bramwell Booth, a home for the intellectually disabled in Temuka.
Casual and support staff will also be out of work when it shuts on
November 30, the report notes.
Stuff.co.nz says staff and families of residents were informed of
the decision in July by its owner, the Salvation Army. A
NZ$100,000 deficit over the previous year was cited as the reason
for it no longer being financially viable, Stuff.co.nz relays.
According to the report, Salvation Army supportive accommodation
national director Gerry Walker said no decision had been made on
the future of the property.
"Our first priority is to resettle the residents and support
staff," the report quotes Mr. Walker as saying.
He said an informed decision would be made on whether it would be
put on the market or rented, Stuff.co.nz relates.
The report says the Salvation Army, Ministry of Health, South
Canterbury District Health Board, Lifelinks, and Idea Services
have been working closely with the residents' families to find
alternative residential care.
The SCDHB has found new homes for the six residents it was dealing
with, while Lifelinks has rehoused the remaining 19, the report
notes.
Bramwell Booth was established in 1916 for war orphans. The home
was funded by the Government, donations and through the Salvation
Army shop in Temuka.
IRA NRG: Liquidators Still on the Hunt for Founder
--------------------------------------------------
Jono Galuszka at Manawatu Standard reports that liquidators are
still on the hunt for a self-styled alternative energy pioneer who
has fled New Zealand and left hundreds of Ira NRG investors out of
pocket. But if they cannot find him in nine months, the
liquidation could be wrapped up, the report says.
For nearly three years, Manawatu Standard relates, alternative
energy business Ira NRG has been in liquidation.
According to the report, the company has more than 230
shareholders -- including about 30 from Manawatu and Horowhenua
-- who bought into the company after a series of sales roadshows
across the country. But during that time, liquidators have been
unable to track down the company's founder and director
Simon Romana to question him about the company's business, says
Manawatu Standard.
Manawatu Standard reports that liquidator Clive Johnson --
cajohnson@xtra.co.nz -- said in his latest liquidation report that
he was making "final inquiries" as to where Mr. Romana was.
Previous reports said Mr. Romana was living overseas at an unknown
location, and had spent some of the money from the share offer on
personal expenses, the report relays.
No distributions have been made, as no funds have been recovered,
Manawatu Standard notes.
The only known debts so far was NZ$30,000 owed to unsecured
creditors, the report says.
Manawatu Standard adds that Mr. Johnson said the liquidation
should be completed in nine months.
It is also unknown how much money was made from the share offer,
and will probably stay that way if Mr. Romana is never found, the
report notes.
LANE WALKER: Ex-Boss Jailed for Multi-million Dollar Fraud
----------------------------------------------------------
The New Zealand Herald reports that the former boss of Lane Walker
Rudkin (LWR), Ken Anderson, has been jailed for six years for his
role in a multi-million dollar fraud.
Ken Anderson was sentenced by Judge Jane Farish at the
Christchurch District Court on Nov. 25, 2013, according to The New
Zealand Herald.
The report relates that Mr. Anderson was the sole director and
ultimate shareholder of Lane Walker when it went into receivership
in April 2009. The report discloses that after a 21-month
investigation, the Serious Fraud Office (SFO) laid 61 charges
against Mr. Anderson in 2011 for allegedly fabricating financial
documents to gain loans from Westpac, the report notes.
The report relays that as a result of the fraud, losses of NZD70
million were suffered.
The SFO also laid 21 charges against him for allegedly using fake
documents to gain funds with a letter of credit facility from
Westpac, the report says.
Last month, the report recalls, Mr. Anderson pleaded guilty to
three representative charges.
The report says that the charges state that between November 2006
and March 2009 with intent to obtain a pecuniary advantage,
dishonestly and without claim of right Mr. Anderson used or
attempted to use a document to obtain funds from Westpac, and for
credit transactions between another company he was connected with.
The report relates that a co-accused, with name suppression, also
admitted a charge of using false documentation to obtain funds
under a letter of credit facility, and was fined $2000.
SFO director Julie Read recognized the high level of public
interest in this case, the report adds.
The report adds that Mr. Anderson took over Lane Walker Rudkin in
2001 with then-wife Patricia, who, according to the Companies
Office, officially ended her involvement with LWR in 2006.
Lane Walker Rudkin was one of Canterbury's most famous brands and
biggest employers, with some 4000 staff employed at its peak.
=================
S I N G A P O R E
=================
PACNET LTD: Moody's Affirms CFR & $300MM Notes Rating at B2
-----------------------------------------------------------
Moody's Investors Service has affirmed Pacnet Limited's B2
corporate family rating and the provisional (P)B2 rating on its
proposed USD senior secured guaranteed notes.
At the same time, Moody's has also affirmed the B2 rating on
Pacnet's existing USD300 million 9.25% senior secured guaranteed
notes due 2015.
The outlook for the ratings remains negative.
Ratings Rationale:
On November 26, Pacnet launched a USD senior secured guaranteed
note offering.
The proceeds will be used to redeem the existing USD300 million
2015 notes, including an early redemption premium of USD14
million. The remainder will be used for general corporate
purposes.
"The successful completion of this transaction will help Pacnet
extend its debt maturity profile and alleviate any near-term
liquidity pressures, an outcome which would be credit positive,"
says Annalisa Di Chiara, a Moody's Vice President and Analyst.
The refinancing will also result in the covenant cushion for the
debt-service coverage ratio -- under Pacnet's USD50 million
revolving credit facility -- improving from current levels, as
scheduled amortizations will not start until 2016.
"However, if the refinancing is not executed by end-December, then
the terms and conditions on the bank facility will become more
restrictive, thereby putting additional pressure on the company's
liquidity position over the next 12-24 months. This is because
amortizations on the bank facility would -- in such a scenario --
be brought forward to 2014, and the USD300 million existing notes
also mature in November 2015," adds Di Chiara, also Moody's Lead
Analyst for Pacnet.
The B2 rating is supported by Pacnet's extensive intra-Asian and
trans-Pacific submarine cable infrastructure, which positions the
company well to benefit from expanding bandwidth demand and the
conversion of telephony to IP-based capacity.
The ratings outlook remains negative and continues to reflect the
company's small size in a highly competitive environment. Moody's
expects Pacnet's debt-servicing obligations and capex to continue
to exceed operating cash flow, thereby eroding cash balances, if
it proves unable to execute its business strategy as expected.
Upward rating pressure is unlikely, given the negative ratings
outlook.
However, the outlook could return to stable if quarterly EBITDA is
sustained above USD30 million and its liquidity position improves
further, as the company does not maintain any working capital
facilities.
Moody's would consider three to four quarters of EBITDA generation
consistently in the USD30-35 million range and a minimum cash
balance of USD75 million as evidence of more resilient cash flow
generation and an improving liquidity position.
Further negative pressure will arise if Pacnet's EBITDA is kept
below USD 20-25 million on a quarterly basis, or its debt/EBITDA
exceeds 5.0x, or the company's cash position declines below USD40
million. Furthermore, a failure to close the bond as expected
would pressure the ratings.
Pacnet, incorporated in Bermuda in June 2006, owns and operates
Asia's largest privately owned submarine cable network. Pacnet
provides data connectivity solutions to major telecommunications
carriers, large multinational enterprises, and small- to medium-
sized enterprises in the Asia-Pacific region that require multi-
national internet protocol-based (IP-based) solutions and
connectivity.
====================
S O U T H K O R E A
====================
KB KOOKMIN: Regulator Mulls Suspension of Some Branches
-------------------------------------------------------
Kim Yon-se at The Korea Herald reports that financial supervisory
officials said November 26 that they are considering halting the
operations of some branches of KB Kookmin Bank, which has been
under full-fledged regulatory investigation over its irregular
business practices.
The Financial Supervisory Service said several of the commercial
bank's branches in Korea and abroad were found to have engaged in
misconduct including embezzlement, money laundering, unauthorized
lending and loan interest-overcharging, according to the report.
Further, the FSS -- in collaboration with the prosecution and the
National Tax Service -- is widening the scope of its inquiry into
the allegations that some dubious loans, issued by the lender's
Tokyo branch, may have been used for political slush funds of the
former administration, The Korea Herald relates.
"Unlike our periodical probes of each financial firm, the current
scrutiny into KB is an extraordinary case," the report quotes an
FSS official as saying. "The chief regulator (FSS Governor Choi
Soo-hyun) has already pledged to reprimand financial industry CEOs
engaged in ethical breaches."
According to the report, the official said he has not ruled out
the possibility that some KB branches (or the bank's headquarters)
will be subject to business suspension for a certain period. As
well, sanctions may be handed down against a group of executives
at the bank and its parent company, KB Financial Group.
The report relates the FSS also plans to prevent the move by the
nation's second-largest financial group to offer performance-based
extra incentives to executives at the end of this year.
FSS said an employee of the KB headquarters recently embezzled
company funds totaling KRW9 billion ($8.2 million), The Korea
Herald relates.
The report says regulatory inspectors are conducting an on-the-
spot investigation at the KB Kookmin Bank headquarters in Yeouido,
Seoul, in a bid to reveal whether the lender has been negligent in
internal controlling.
The Tokyo branch manager was caught by the authorities in
September over improper issuance of loans worth KRW170 billion
during the former Lee Myung-bak administration, the report
recalls.
The FSS is set to hand over the case to the prosecution, while
some market insiders allege that the loans could have been glossed
over by former KB Financial Group chairman Euh Yoon-dae, a close
confidant of former President Lee.
===============
X X X X X X X X
===============
* S&P Puts 23 Asia-Pacific (ex-Japan) Ratings on Watch Positive
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it has reviewed its
ratings on the corporate industrial and utility companies that
were labeled as "under criteria observation" (UCO) after the
publishing of its revised Corporate criteria on Nov. 19, 2013.
The ratings on 23 Asia-Pacific (ex-Japan) corporate entities were
placed on CreditWatch with positive implications as a result of
this review, meaning that they will likely be raised.
At the same time, the ratings on eight Asia-Pacific (ex-Japan)
corporate entities were placed on CreditWatch with negative
implications, meaning that they will likely be lowered.
Over the weeks that follow, S&P will publish individual analytical
reports on the companies identified below to resolve these
CreditWatch listings.
All other Asia-Pacific (ex-Japan) corporate issuer ratings are
unaffected under the revised corporate criteria, and their UCO
labels will be removed.
RATINGS LIST
Asia-Pacific Issuer Ratings Placed On Watch Due To Revised
Corporate Criteria
ISSUER CREDIT RATINGS TO FROM
AUSTRALIA AND NEW ZEALAND
ATCO Gas Australia LP
Foreign currency LT rating BBB/Watch Pos BBB/Positive
Local currency LT rating BBB/Watch Pos BBB/Positive
CitiPower Trust (The)
Foreign currency LT rating A-/Watch Neg A-/Stable
Local currency LT rating A-/Watch Neg A-/Stable
Orica Ltd.
Foreign currency LT rating BBB+/Watch Neg BBB+/Stable
Foreign currency ST rating A-2 A-2
Local currency LT rating BBB+/Watch Neg BBB+/Stable
Local currency ST rating A-2 A-2
Powercor Australia LLC
Foreign currency LT rating A-/Watch Neg A-/Stable
Foreign currency ST rating A-2 A-2
Local currency LT rating A-/Watch Neg A-/Stable
Local currency ST rating A-2 A-2
SP AusNet Group (including the below-listed subsidiaries)
Foreign currency LT rating BBB+/Watch Pos BBB+/Stable
Local currency LT rating BBB+/Watch Pos BBB+/Stable
SPI Australia Holdings (Partnership) L.P.
Foreign currency LT rating BBB+/Watch Pos BBB+/Stable
Local currency LT rating BBB+/Watch Pos BBB+/Stable
SPI Electricity & Gas Australia Holdings Pty Ltd.
Foreign currency LT rating BBB+/Watch Pos BBB+/Stable
Foreign currency ST rating A-2 A-2
Local currency LT rating BBB+/Watch Pos BBB+/Stable
Local currency ST rating A-2 A-2
SPI PowerNet Pty Ltd.
Foreign currency LT rating BBB+/Watch Pos BBB+/Stable
Local currency LT rating BBB+/Watch Pos BBB+/Stable
SPI Electricity Pty Ltd.
Foreign currency LT rating BBB+/Watch Pos BBB+/Stable
Local currency LT rating BBB+/Watch Pos BBB+/Stable
SPI (Australia) Assets Pty Ltd. (including below-listed
subsidiary)
Foreign currency LT rating BBB/Watch Pos BBB/Stable
Local currency LT rating BBB/Watch Pos BBB/Stable
Senior unsecured guaranteed debt*
AA- AA-
Jemena Ltd.
Foreign currency LT rating BBB/Watch Pos BBB/Stable
Local currency LT rating BBB/Watch Pos BBB/Stable
Transurban Finance Co. Pty Ltd.
Foreign currency LT rating BBB+/Watch Pos BBB+/Stable
Local currency LT rating BBB+/Watch Pos BBB+/Stable
Vector Ltd.
Foreign currency LT rating BBB+/Watch Neg BBB+/Stable
Local currency LT rating BBB+/Watch Neg BBB+/Stable
Westfield Retail Trust
Foreign currency LT rating A+/Watch Pos A+/Stable
Foreign currency ST rating A-1/Watch Pos A-1
Local currency LT rating A+/Watch Pos A+/Stable
Local currency ST rating A-1/Watch Pos A-1
CHINA/HONG KONG/KOREA/TAIWAN
Beijing Enterprises Holdings Ltd.
Foreign currency LT rating A-/Watch Neg A-/Negative
Local currency LT rating A-/Watch Neg A-/Negative
China scale LT rating cn AA-/Watch Neg cnAA-
China State Construction International Holdings Ltd.
Foreign currency LT rating BBB-/Watch Pos BBB-/Stable
Local currency LT rating BBB-/Watch Pos BBB-/Stable
China scale LT rating cnA-/Watch Pos cnA-
Franshion Properties (China) Ltd.
Foreign currency LT rating BB+/Watch Pos BB+/Stable
Local currency LT rating BB+/Watch Pos BB+/Stable
China scale LT rating cnBBB+/Watch Pos cnBBB+
Jardine Strategic Holdings Ltd.
Foreign currency LT rating A-/Watch Pos A-/Stable
Local currency LT rating A-/Watch Pos A-/Stable
China scale LT rating cnAA/Watch Pos cnAA
Sinochem Hong Kong (Group) Co. Ltd.
Foreign currency LT rating BBB/Watch Pos BBB/Stable
Local currency LT rating BBB/Watch Pos BBB/Stable
China scale LT rating cnA/Watch Pos cnA/
SK Hynix Inc.
Foreign currency LT rating BB/Watch Pos BB/Stable
Local currency LT rating BB/Watch Pos BB/Stable
Senior unsecured guaranteed debt*
A A
Far EasTone Telecommunications Co. Ltd.
Foreign currency LT rating A-/Watch Neg A-/Stable
Local currency LT rating A-/Watch Neg A-/Stable
China scale LT rating cnAA/Watch Neg cnAA
SOUTH SOUTH-EAST ASIA
Aegis Ltd.
Foreign currency LT rating BB-/Watch Neg BB-/Stable
Local currency LT rating BB-/Watch Neg BB-/Stable
Genpact Ltd.
Foreign currency LT rating BB+/Watch Pos BB+/Stable
Local currency LT rating BB+/Watch Pos BB+/Stable
Genting Bhd.
Foreign currency LT rating BBB+/Watch Pos BBB+/Stable
Local currency LT rating BBB+/Watch Pos BBB+/Stable
Asean scale LT rating axA+/Watch Pos axA+
Infosys Ltd.
Foreign currency LT rating BBB+/Watch Pos
BBB+/Negative
Local currency LT rating BBB+/Watch Pos
BBB+/Negative
Pakistan Mobile Communications Ltd.
Foreign currency LT rating B-/Stable B-/Stable
Local currency LT rating B-/Watch Pos B-/Stable
Philippine Long Distance Telephone Co.
Foreign currency LT rating BBB/Stable BBB/Stable
Asean scale LT rating axA/Watch Pos axA
PT Astra International Tbk.
Foreign currency LT rating BBB-/Stable BBB-/Stable
Local currency LT rating BBB-/Watch Pos BBB-/Stable
Asean scale LT rating axA-/Watch Pos axA-
PT Indosat Tbk.
Foreign currency LT rating BB+/Watch Pos BB+/Stable
Local currency LT rating BB+/Watch Pos BB+/Stable
Asean scale LT rating axBBB+/Watch Pos axBBB+
PT MNC Sky Vision
Foreign currency LT rating B+/Watch Pos B+/Stable
Local currency LT rating B+/Watch Pos B+/Stable
Asean scale LT rating axBB/Watch Pos axBB
PT Telekomunikasi Selular
Foreign currency LT rating BBB-/Stable BBB-/Stable
Local currency LT rating BBB-/Watch Pos BBB-/Stable
Asean scale LT rating axA-/Watch Pos axA-
Sri Lanka Telecom PLC
Foreign currency LT rating B+/Stable B+/Stable
Local currency LT rating B+/Watch Pos B+/Stable
Tata Consultancy Services Ltd.
Foreign currency LT rating BBB+/Watch Pos
BBB+/Negative
Local currency LT rating BBB+/Watch Pos
BBB+/Negative
Tata Steel UK Holdings Ltd.
Foreign currency LT rating B+/Watch Pos B+/Negative
Local currency LT rating B+/Watch Pos B+/Negative
ST rating B B
Thai Beverage Public Co. Ltd.
Foreign currency LT rating BBB-/Watch Neg BBB-
/Negative
Local currency LT rating BBB-/Watch Neg BBB-
/Negative
Asean scale LT rating axBBB+/Watch Neg axBBB+
Asean scale ST rating axA-2/Watch Neg axA-2
Wipro Ltd.
Foreign currency LT rating BBB+/Watch Pos
BBB+/Negative
Local currency LT rating BBB+/Watch Pos
BBB+/Negative
* Guaranteed debt issue not affected by outlook change. Senior-
secured debt not affected by outlook change. Foreign currency
long-term ratings are unaffected.
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
some position in the issuers' public debt and equity securities
about which we report.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR-AP. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Friday's edition of the TCR-AP features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel
Elaine T. Fernandez, Julie Anne L. Toledo, Frauline S. Abangan,
and Peter A. Chapman, Editors.
Copyright 2013. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000 or Nina Novak at 202-241-8200.
*** End of Transmission ***