/raid1/www/Hosts/bankrupt/TCRAP_Public/131212.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, December 12, 2013, Vol. 16, No. 246
Headlines
A U S T R A L I A
BILLABONG INT'L: Bid to Remove Chairman and Board Members Fails
BRADDON INVESTMENT: ASIC Moves to Wind-Up Debenture Firm
CRUSADE ABS 2013-1: Fitch Rates AUD7MM Class E Notes 'BBsf'
FOREST ENTERPRISES: Sale Process Underway for Forestry Assets
GENERAL MOTORS: To Cease Manufacturing in Australia By 2017
MEBBIN SPRINGS: Estate Up for Sale Following Owners' Receivership
QANTAS AIRWAYS: Plunges to Record Low With $390MM Loss Forecast
C H I N A
* Fitch Says Competition Among Homebuilders to Intensify in 2014
I N D I A
A.G. RICE: CRISIL Suspends 'B' Rating on INR110MM Loan
ANIRUDH TEXCHEM: ICRA Reaffirms 'B+' Rating on INR9.45cr Loans
ASN AGRI: ICRA Reaffirms 'B+' Ratings on INR15.07cr Loans
BHABANI OFFSET: ICRA Assigns 'D' Ratings to INR11.1cr Loans
DSM SOFT: CRISIL Reaffirms 'D' Ratings on INR106.8MM Loans
GURUKRUPA METALS: ICRA Reaffirms 'B-' Rating on INR10cr Loan
HARSORIA HOSPITALITY: ICRA Assigns 'B' Rating to INR10.5cr Loans
ISPAT ALLOYS: CRISIL Lowers Ratings on INR140MM Loans to 'D'
KARIKALI AMMAN: ICRA Assigns 'B' Ratings to INR16.67cr Loans
KMB TRADING: CRISIL Reaffirms 'B-' Ratings on INR265MM Loans
LAKSHMI ENTERPRISES: ICRA Reaffirms B+ Ratings on INR15cr Loans
MADHAV COTTON: ICRA Suspends 'B+' Rating on INR25cr Loan
MANEESH PIPES: ICRA Reaffirms 'B+' Ratings on INR9.38cr Loans
MATOSHRI PRATISHTHAN: ICRA Assigns 'D' Ratings to INR8cr Loans
MUNEER ENTERPRISE: ICRA Reaffirms 'B+' Rating on INR5.75cr Loans
NEELMANI DEVELOPERS: ICRA Reaffirms 'B' Rating on INR6cr Loan
NEVATIA STEEL: ICRA Reaffirms 'B-' Rating on INR0.5cr Loan
P.K. SULPHIKER: CRISIL Reaffirms B+ Rating on INR70MM Loan
PARMESHWARI SILK: ICRA Reaffirms B+ Rating on INR21cr Loan
PERODY BUILDERS: CRISIL Assigns 'B+' Rating to INR50MM LT Loan
PLASCARE INDUSTRIES: CRISIL Reaffirms D Ratings on INR400MM Loan
REGALIA BUILDTECH: ICRA Suspends 'D' Rating on INR50cr Loan
S.S. OVERSEAS: CRISIL Reaffirms 'B' Ratings on INR180MM Loans
SACHINAM TRAVELS: CRISIL Suspends 'B' Ratings on INR120MM Loans
SAI ENTERPRISE: CRISIL Suspends 'B+' Rating on INR200MM Loan
SANKAR COTTON: ICRA Assigns 'B' Rating to INR20cr LT Loans
SGS JEWELLERY: ICRA Rates INR6cr Fund Based Loans at 'B-'
SHIVAM IRON: ICRA Cuts Ratings on INR218.35cr Loans to 'D'
SILVEX AND COMPANY: CRISIL Suspends B Ratings on INR50MM Loans
STAR TANNERY: CRISIL Suspends 'B' Rating on INR35MM Loan
UTTARAYAN STEEL: CRISIL Suspends 'B-' Ratings on INR73.2MM Loans
VITA GRANITO: CRISIL Suspends 'B+' Ratings on INR354.5MM Loans
VORTEX RUBBER: ICRA Assigns 'B-' Rating to INR8cr Cash Credit
WALIA AGNI: ICRA Reaffirms 'D' Ratings on INR32cr Loans
WEBSOL ENERGY: Faces Liquidation as Orders and Revenues Dwindle
N E W Z E A L A N D
ASR LTD: Boscombe Reef to Reopen After a Council Gets Payouts
CHORUS LTD: Likely to "Cut All Discretionary Activity"
S O U T H K O R E A
AQ ENTERTAINMEN: JYP Entertainment Liquidates Firm
SSANGYONG ENGINEERING: Creditor Row Major Setback to Debt Workout
S R I L A N K A
NAT'L SAVINGS BANK: Fitch Rates USD-Denominated Notes at BB-
T H A I L A N D
THAI BEVERAGE: S&P Lowers CCR to 'BB+'; Outlook Stable
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A U S T R A L I A
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BILLABONG INT'L: Bid to Remove Chairman and Board Members Fails
---------------------------------------------------------------
Australian Associated Press reports that a move by one of
Billabong Ltd's major shareholders to oust several board members,
including the chairman, has failed.
AAP relates that Coastal Capital International, which holds a
7.6 per cent stake in the surfwear retailer, sought to remove
chairman Ian Pollard and directors Howard Mowlem and Sally Pitkin
at the annual general meeting held on Dec. 10.
But other shareholders voted against the move, as well as other
proposals from Coastal Capital to restrict Billabong's ability to
enter into new debt arrangements and sell its assets or brands,
AAP relays. However, almost 34 per cent of shareholder votes went
against Mr. Pollard's re-election to the Billabong board, an
indication of their displeasure with the company's recent
performance and drawn out refinancing process, the report says.
Billabong made a AUD860 million loss in the 2012/13 financial
year, AAP notes.
In September, it secured a AUD586 million deal with Centerbridge
and Oaktree Capital Management, after pulling out of an earlier
deal reached with rival American private equity firm Altamont,
which would have resulted in former Oakley boss Scott Olivet
becoming chief executive, according to AAP.
AAP states that Mr. Pollard admitted shareholders had suffered as
a result of several failed takeover bids and the drawn out
refinancing negotiations.
"Getting here has been difficult and strenuous for the company,
and the distractions and costs of these processes have resulted in
both lost opportunity and lost shareholder value," he said at the
meeting, the report relays.
"Throughout this period, a brand that has been built on some of
the simplest joys in life has been mired in high profile corporate
transactions of extreme complexity," the report quotes Neil Fiske,
Billabong's new chief executive who previously led US outdoor
clothing group Eddie Bauer, outlined a seven-point plan to turn
around Billabong's fortunes, as saying.
"We've been trying to do many things, and not many of them
particularly well . . . are we a retail company with brands, or
brands with retail?"
Mr. Fiske said product lines would need to be reduced by 25 to 30
per cent, the report adds.
About Billabong
Based in Australia, Billabong International Limited (ASX:BBG) --
http://www.billabongbiz.com/-- is engaged in the wholesaling and
retailing of surf, skate, snow and sports apparel, accessories and
hardware, and the licensing of its trademarks to specified regions
of the world.
Bloomberg News reported that the Gold Coast, Australia-based
company has closed 158 stores, canceled relationships with three-
quarters of its suppliers, and is cutting 15 percent of jobs in
its European division.
The value of its 13 brands fell to AUD90 million at the end of
June from AUD614 million in December 2011, and the Billabong label
itself is worthless, the company said in its financial statements,
Bloomberg said. About AUD37 million of group brand value was
locked up in the DaKine outdoor clothing and backpack label which
Billabong sold to Altamont last month, relayed Bloomberg.
Four other brands, including Element skateboards and Palmers
surfboard accessories, were also written down to a zero valuation,
according to the statements cited by Bloomberg.
Full-year losses widened to AUD860 million in the year ended June
from a AUD276 million loss in the previous 12 months, compared to
the AUD547 million average loss expected from four analysts
surveyed by Bloomberg. A 14 percent fall in sales put revenue
below the company's operating costs and the company took a loan
from Altamont Capital Partners to refinance its debt, Bloomberg
added.
BRADDON INVESTMENT: ASIC Moves to Wind-Up Debenture Firm
---------------------------------------------------------
The Australian Securities and Investment Commission has moved to
wind up Tasmanian debenture firm Braddon Investment and Finance
Pty Ltd alleging it cannot comply with its legal obligations.
Braddon, which is based in Smithton, has raised funds from
investors through unsecured deposits and used the money to offer
loans to the general public, usually for the purchase of cars or
farm equipment.
It has raised about AUD5 million from more than 140 investors.
To offer a debenture product, companies must have in place certain
investor safeguards, including appointing a trustee and entering
into a trust deed. The trustee is appointed to act in the interest
of the investors.
In proceedings filed with the Supreme Court of Tasmania, ASIC
alleges Braddon has failed to appoint a trustee or enter into a
trust deed.
"As the company is not in a position to comply with the law, ASIC
is moving to wind it up on just and equitable grounds," ASIC
Commissioner John Price said.
ASIC will ask the court for a liquidator to be appointed.
ASIC has not alleged any dishonesty in the proceedings nor is
ASIC's claim based on any allegations of insolvency.
The matter is in court on Dec. 17, 2013.
CRUSADE ABS 2013-1: Fitch Rates AUD7MM Class E Notes 'BBsf'
-----------------------------------------------------------
Fitch Ratings has assigned expected ratings to Crusade ABS Series
2013-1 Trust's asset-backed floating-rate notes. The issuance
consists of notes backed by Australian automotive loan and lease
receivables originated by St.George Finance Limited. The ratings
are as follows:
AUD420.0m Class A notes: 'AAAsf'; Outlook Stable;
AUD20.0m Class B notes: 'AAsf'; Outlook Stable;
AUD15.0m Class C notes: 'Asf'; Outlook Stable;
AUD12.0m Class D notes: 'BBBsf'; Outlook Stable;
AUD7.0m Class E notes: 'BBsf'; Outlook Stable; and
AUD26.0m Seller notes: NR
The notes are issued by Perpetual Corporate Trust Limited in its
capacity as trustee of Crusade ABS Series 2013-1 Trust. The latter
is a legally distinct trust established pursuant to a master trust
and security trust deed.
At the cut-off date, the pool was made up of receivables backed by
motor vehicles with a weighted-average (WA) seasoning of 21.9
months and an average size of AUD19,326. Distribution of the
portfolio is concentrated on the east coast, in line with
population distribution. The WA balloon residual percentage is
7.7% (percentage of the original outstanding balance of the
receivable).
Key Rating Drivers:
Experienced Originator: St.George Bank established its auto
finance business in 1994 through the purchase of a business
incorporating motor vehicle receivables, commercial lending, and
private banking, from Barclays Bank Australia Limited. St.George
Bank is a wholly owned subsidiary of Westpac Banking Corporation
(Westpac, AA-/Stable/F1+).
Adequate Data Availability: St.George Finance provided Fitch with
seven years of historical static loss data, and a complete set of
line-by-line data fields, as expected for its assessment.
Changing Origination Composition: Consumer finance as a proportion
of the receivables originated has increased significantly over the
past five years. Consumer finance has higher levels of losses and
longer lease terms than other originated product types, up to 84
months. This change in composition has been addressed in the
rating analysis.
Low Historical Defaults: St.George Finance's receivables book has
experienced relatively low levels of defaults to date, with the
majority of quarterly vintage gross loss percentages ranging from
1.1% to 3.9% for passenger vehicles. Delinquencies greater than 30
days have generally tracked below 3.0%.
Consistent Credit Quality: This transaction's collateral backing
has statistically similar credit quality to prior pools
securitised under the Crusade ABS programme.
Rating Sensitivity:
Unexpected increases in the frequency of foreclosures, and the
loss severity on defaulted loans, could produce loss levels higher
than Fitch's base case, which could in turn result in potentially
negative rating actions on the notes. Fitch has evaluated the
sensitivity of the ratings assigned to Crusade ABS Series 2013-1
Trust to increased gross default levels, and decreased recovery
rates over the life of the transaction.
Its analysis found that collectively all notes' ratings remain
stable under Fitch's mild (10% increase), moderate (25% increase)
and severe default (50% increase) scenarios.
Recovery scenarios, whereby recovery rate assumptions are
decreased, include mild (10% decrease), moderate (25% decrease)
and severe (50% decrease) stressed scenarios. The analysis showed
that the Class A notes would be downgraded only under the severe
scenario. All other rated notes remain stable under the mild,
moderate and severe stresses.
The Class A notes were subject to a downgrade only under a severe
scenario combination of both increased defaults and decreased
recovery rates. All other rated notes remain stable under the
mild, moderate and severe stresses.
FOREST ENTERPRISES: Sale Process Underway for Forestry Assets
-------------------------------------------------------------
Forest Enterprises Australia Limited receivers announced the
commencement of a sale process of the entire FEA forestry estate,
comprising both freehold land and hardwood plantation assets.
The sale process reflects over six months of collaborative efforts
by the Receivers, Deed Administrators, secured creditors and
managed investment scheme (MIS) grower investors to formulate an
endorsed exit process.
The Receivers and Deed Administrators entered into a binding co-
operative agreement in September 2013 to enable an effective sale.
In November 2013, the grower investors in the 1995 to 2001 schemes
passed resolutions ratifying amendments to Scheme constitutions
which will assist in giving effect to the co-operative agreement.
In addition, court orders have been secured to wind-up the 2002 to
2009 schemes to facilitate the sale process.
Receiver Tim Norman said a great deal of work had been done to
enable an effective sale.
"This has been a long and complex process, but we have now reached
an agreement with all parties to allow the FEA sale process to
commence," he said.
"The work undertaken upfront provides potential purchasers with
confidence that we can transact and ensure an orderly and well-
structured sale of the FEA assets.
"Our focus will be on maximising both certainty and value for all
stakeholders, including the grower investors and secured creditors
of FEA."
FEA Assets For Sale
The estate consists of approximately 97,900 hectares of freehold
land with hardwood plantations of approximately 46,200 hectares.
The properties are mainly located in the prime forestry and
agricultural areas of Tasmania, New South Wales and Queensland.
The land bank was established over many years and comprises over
400 properties and over 1,000 individual titles, providing
flexibility for estate management and land use opportunities.
The plantations have a weighted average age of approximately eight
years, with a significant amount of mature trees offering
immediate cash flow. In general, the estate properties are
proximate to established infrastructure and export facilities.
Sale Process
The Receivers have appointed Gresham Advisory Partners to conduct
the sale process with the support of the secured creditors and
Deed Administrators. The sale process will commence shortly with
initial bids due in February 2014.
The Receivers will consider all options for the realisation of the
FEA assets, including sale of the assets in one parcel, or
separate sales in smaller parcels. Parties interested in buying
individual properties will also have an opportunity to participate
in the sale process via a dedicated web site - www.feasale.com.au
Purchasers will have the option of acquiring the assets on an
unencumbered basis (ie acquiring the land and trees without any
MIS overlay) or there is potential for some of the MIS schemes to
continue over a portion of the Tasmanian land and for the new land
owner to receive a cash rental stream.
About FEA
Forest Enterprises Australia Limited (ASX:FEA) --
http://www.fealtd.com/-- is a vertically integrated forestry and
forest products company. It is engaged in the sale of woodlot
investments through forestry investments; preparation,
establishment and maintenance of plantations; timber harvesting;
provision of finance to approved growers; sawmilling and wood
chipping of forest produce, and direct exporting of forest produce
to Asian markets. FEA operates in two divisions: forest products,
which includes forest management services and the processing of
forest products, including whole logs, woodchips and sawn timber,
and forestry investment, which includes establishment and
financing of managed woodlots and provision of related forestry
services, including the lease of investment land. Its wholly
owned subsidiaries include FEA Plantations Limited, FEA Carbon Pty
Ltd, Tasmanian Plantation Pty Ltd, Tasmanian Plantation Unit Trust
and FEA Timberlands Fund.
BRI Ferrier has been appointed as voluntary administrators of:
-- Forest Enterprises Australia Limited;
-- FEA Plantations Limited;
-- Tasmanian Plantation Pty Ltd; and
-- FEA Carbon Pty Ltd.
The banks on April 14, 2010, appointed Deloitte partners
Tim Norman -- tnorman@deloitte.com.au -- and Sal Algeri --
saalgeri@deloitte.com.au -- as Receivers and Managers of Forest
Enterprises Australia Limited and wholly owned subsidiary FEA
Carbon Pty Ltd (FEAC). Messrs. Norman and Algeri have also been
appointed as 'agents for the mortagee in possession' of Tasmanian
Plantations Pty Ltd, another wholly owned property holding
subsidiary of FEA.
The company has debt facilities totaling AU$240 million with ANZ
and the Commonwealth Bank which mature in January 2011.
GENERAL MOTORS: To Cease Manufacturing in Australia By 2017
-----------------------------------------------------------
As part of its ongoing actions to decisively address the
performance of its global operations, General Motors announced on
Dec. 10 it would transition to a national sales company in
Australia and New Zealand. The company also said it would
discontinue vehicle and engine manufacturing and significantly
reduce its engineering operations in Australia by the end of 2017.
"We are completely dedicated to strengthening our global
operations while meeting the needs of our customers," said GM
Chairman and CEO Dan Akerson. "The decision to end manufacturing
in Australia reflects the perfect storm of negative influences the
automotive industry faces in the country, including the sustained
strength of the Australian dollar, high cost of production, small
domestic market and arguably the most competitive and fragmented
auto market in the world."
As a result of the company's actions, approximately 2,900
positions will be impacted over the next four years. This will
comprise 1,600 from the Elizabeth vehicle manufacturing plant and
approximately 1,300 from Holden's Victorian workforce.
Holden will continue to have a significant presence in Australia
beyond 2017, comprising a national sales company, a national parts
distribution centre and a global design studio.
GM Holden Chairman and Managing Director Mike Devereux said an
important priority over the next four years would be to ensure the
best possible transition for workers in South Australia and
Victoria.
"This has been a difficult decision given Holden's long and proud
history of building vehicles in Australia," said Mr. Devereux. "We
are dedicated to working with our teams, unions and the local
communities, along with the federal and state governments, to
support our people."
The sale and service of Holden vehicles will be unaffected by this
announcement and will continue through the extensive network of
Holden dealers across Australia and New Zealand. Warranty terms
and spare parts availability will remain unchanged.
"GM remains committed to the automotive industry in Australia and
New Zealand. We recognize the need for change and understand the
government's point of view. Moving forward, our business model
will change significantly however, GM Holden will remain an
integral part of its communities and an important employer both
directly and through our dealers," Mr. Devereux said.
Since 2001, the Australian dollar has risen from US$0.50 to as
high as US$1.10 and from as low as 47 to as high as 79 on the
Trade Weighted Index. The Australian automotive industry is
heavily trade exposed. The appreciation of the currency alone
means that at the Australian dollar's peak, making things in
Australia was 65 percent more expensive compared to just a decade
earlier.
With the decision to discontinue vehicle and engine manufacturing
in Australia by the end of 2017, GM expects to record pre-tax
charges of $400 million to $600 million in the fourth quarter of
2013. The charges would consist of approximately $300 million to
$500 million for non-cash asset impairment charges including
property, plant and equipment and approximately $100 million for
cash payment of exit-related costs including certain employee
severance related costs. Additional charges are expected to be
incurred through 2017 for incremental future cash payments of
employee severance once negotiations of the amount are completed
with the employees' union. The asset impairment charges will be
considered special for EBIT-adjusted reporting purposes.
About Motors Liquidation
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on
June 1, 2009. The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin,
Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges
LLP, assist the Debtors in their restructuring efforts. Al Koch
at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as
the Chief Executive Officer for Motors Liquidation Company. GM
is also represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP
is providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP. Garden City Group is the claims and notice
agent of the Debtors.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured
Creditors Holding Asbestos-Related Claims. Lawyers at Kramer
Levin Naftalis & Frankel LLP served as bankruptcy counsel to the
Creditors Committee. Attorneys at Butzel Long served as counsel
on supplier contract matters. FTI Consulting Inc. served as
financial advisors to the Creditors Committee. Elihu Inselbuch,
Esq., at Caplin & Drysdale, Chartered, represented the Asbestos
Committee. Legal Analysis Systems, Inc., served as asbestos
valuation analyst.
The Bankruptcy Court entered an order confirming the Debtors'
Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan
was declared effect on March 31.
On Dec. 15, 2011, Motors Liquidation Company was dissolved. On
the Dissolution Date, pursuant to the Plan and the Motors
Liquidation Company GUC Trust Agreement, dated March 30, 2011,
between the parties thereto, the trust administrator and trustee
-- GUC Trust Administrator -- of the Motors Liquidation Company
GUC Trust, assumed responsibility for the affairs of and certain
claims against MLC and its debtor subsidiaries that were not
concluded prior to the Dissolution Date.
MEBBIN SPRINGS: Estate Up for Sale Following Owners' Receivership
-----------------------------------------------------------------
Cliff Sanderson at dissolve.com.au reports that Mebbin Springs
Estate has been put up for sale following the placement of its
owners into receivership more than 12 months ago.
According to the report, Tony Williams --
tony.williams@raywhite.com -- special projects agent at Ray White,
said the property has been able to attract solid interest.
dissolve.com.au relates that the property has been placed on the
market by Mr. Williams in conjunction with Ray White Murwillumbah.
The sale includes 20 titled allotments that range from 4,050 sq.
meter to 8,961sq in sizes with approval for more 44 lots, the
report relays.
QANTAS AIRWAYS: Plunges to Record Low With $390MM Loss Forecast
---------------------------------------------------------------
David Fickling at Bloomberg News reports that Qantas Airways Ltd.
closed at its lowest level since a 1995 privatization as analysts
forecast a record loss amid a market share fight with Virgin
Australia Holdings Ltd.
The stock fell 3 percent to 96.5 Australian cents in Sydney, half
a cent below its previous record low last June, Bloomberg
discloses. Net losses in the year ending June will hit
AUD428 million ($390 million), according to the average of six
analyst estimates compiled by Bloomberg, the second annual loss
for the Sydney-based company since the privatization.
Bloomberg notes that Qantas lost its investment-grade credit
rating on Dec. 6 from Standard & Poor's after the company said it
would have negative free cash flow over the year to June, meaning
it will need to increase debt or sell assets or new shares to pay
for new equipment. Yields, a measure of ticket prices, will fall
to their lowest level in at least a decade as Qantas and Virgin
add more flights than travelers want.
"The market is of the view that they need to raise equity," Peter
Esho, chief market analyst at Invast Financial Services Pty., told
Bloomberg by phone. "Debt is probably a bit too high, which will
need to be funded by selling something."
About Qantas Airways
Headquartered in Sydney, Australia, Qantas Airways Limited --
http://www.qantas.com.au/-- is an Australian airline company
engaged in the operation of international and domestic air
transportation services, and the provision of time definite
freight services. Qantas is also engaged in the sale of
international and domestic holiday tours, and associated support
activities, including flight training, catering, passenger and
ground handling, and engineering and maintenance. It is
organized into four segments: Qantas, Jetstar, Qantas Holidays
and Qantas Flight Catering.
As reported in the Troubled Company Reporter-Asia Pacific on
Dec. 9, 2013, Standard & Poor's Ratings Services lowered its
corporate credit rating on Qantas Airways Ltd. to 'BB+/B', from
'BBB-/A-3'. The outlook is negative. S&P also lowered its senior
unsecured debt ratings on Qantas to 'BB+', from 'BBB-', and placed
the issue ratings on CreditWatch with negative implications.
The downgrades reflect S&P's view that intense competition in the
airline industry has weakened Qantas' business risk profile to
"fair" from "satisfactory", and financial risk profile to
"significant" from "intermediate". S&P don't expect Qantas to
recover to a credit profile commensurate with a 'BBB-' rating in
the near term. S&P recognizes that Qantas has strong financial
flexibility and a good track record of responding to earnings
pressures through cost cutting and other measures. However, S&P
believes in the current circumstances, the benefits would take
time to realize and the positive impact would not be sufficient to
outweigh the pressure on Qantas' stand-alone credit profile.
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C H I N A
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* Fitch Says Competition Among Homebuilders to Intensify in 2014
----------------------------------------------------------------
Competition among Chinese homebuilders will intensify in a slower-
growth environment in 2014, and polarisation of the developers
will widen, Fitch Ratings says in a new report. Polarisation does
not only happen among property companies of different scales, but
also appears in different cities and different product types.
Fitch says Chinese homebuilders' year-on-year (yoy) contracted
gross floor area (GFA) growth in 2014 could be only 5%-10%
compared with the 12% achieved in the first 11 months of 2013 (for
major 30 cities as reported by the data provider, WIND), because
of the significantly higher base in 2013.
Tier 3 and 4 cities in general have not benefited much in the run-
up in prices experienced by larger cities, mainly due to
relatively weak purchasing power and sparse population. In
addition, the seeming success achieved by home purchasing
restrictions in moderating residential property prices has led to
excess liquidity deployed in commercial properties. However, yield
and occupancy rates remain limited except for well-located
properties. Therefore, the lack of fundamentals makes lower-tier
cities and commercial properties vulnerable to a downturn.
Fitch also stresses that smaller developers are likely to leverage
further to expand their operational scale and become more
competitive, because they do not have strong balance sheets and
sufficient land banks typical of larger homebuilders. Not all
smaller developers will be able to correctly balance the reduction
in business risk with the increase in financial risk.
The outlook of the homebuilding sector in China is sensitive to
two key factors: the uncertainties of government policies and the
accessibility to funding sources. While Fitch expects home
purchase restrictions to remain in 2014, any unexpected changes in
China property market or its liquidity will cause downward
pressure on the sector's outlook.
Fitch rates the following companies:
Beijing Capital Land Ltd. (BB+/Negative)
China Aoyuan Property Group Limited (B+/Stable)
China Properties Group Limited (B-/Stable)
CIFI Holdings (Group) Co Ltd (B+/Positive)
China Overseas Land & Investment Limited (BBB+/Stable)
China Vanke Co Ltd (BBB+/Stable)
Evergrande Real Estate Group Limited (BB/Stable)
Franshion Properties (China) Limited (BBB-/Stable)
Future Land Development Holdings Limited (B+/Stable)
Global Logistic Properties Limited (BBB+/Stable)
Golden Wheel Tiandi Holdings Company Limited (B/Stable)
Greenland Holding Group Company Limited (BBB-/Stable)
Guangzhou R&F Properties (BB/Positive)
Lai Fung Holdings (BB-/Stable)
Modern Land (China) Co., Limited (B/Stable)
Poly Real Estate Group Company Limited (BBB+/Stable)
Shanghai Zendai Property Limited (B/Stable)
Shimao Property Holdings Limited (BB/Stable)
Sunac China Holdings Limited (BB-/Stable)
Wuzhou International Holdings Limited (B/Stable)
Xinyuan Real Estate Co Ltd (B+/Stable)
Yuexiu Property Company Limited (BBB-/Stable)
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I N D I A
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A.G. RICE: CRISIL Suspends 'B' Rating on INR110MM Loan
------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of A.G.
Rice Mills.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 110 CRISIL B/Stable Suspended
The suspension of ratings is on account of non-cooperation by AGRM
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, AGRM is yet to
provide adequate information to enable CRISIL to assess AGRM's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
A.G.Rice Mills was established in 1981 as a partnership firm, by
by Mr. Gajinder Kumar and his friend Mr. Avatar Singh in Amritsar,
Punjab. The firm is mainly engaged in milling and marketing of
higher grade variety of rice like Basmati. The firm has a mill of
capacity 6 MT per hour (tph) in operations & sorting capacity of 3
tph. The current capacity utilization is about 20 per cent. The
firm derives 70 per cent of its revenues from sales of basmati
rice while rest coming from non-basmati vaiety. The firm sells
rice under its brand name 'Darbar'.
ANIRUDH TEXCHEM: ICRA Reaffirms 'B+' Rating on INR9.45cr Loans
--------------------------------------------------------------
ICRA has reaffirmed the long term rating of '[ICRA]B+' assigned
earlier to the INR9.45 crore fund based bank facilities of Anirudh
Texchem Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limits 9.45 [ICRA]B+ reaffirmed
The rating continues to draw comfort from the long track record of
the promoters in the textile industry as well as the favorable
location of ATPL's weaving facilities, which provides easy
accessibility to raw materials and processing houses. While the
company expanded its weaving capacity from 20 to 32 looms in
FY2013, increased capacities were however available only for part
of the year (~4 months), consequent to which profitability metrics
of the company remained subdued in FY2013. This coupled with debt-
funded capacity expansion led to high gearing levels and weakened
debt coverage indicators. With commencement of production at the
new looms, while the profitability indicators are expected to
improve, however given the high debt levels as well as working
capital intensive nature of operations of ATPL, the financial
profile is expected to remain characterized by subdued debt
coverage indicators. Further, the rating also remains constrained
by the modest scale of operations of the company and competitive
and fragmented nature of the weaving industry which limits the
pricing power of the company.
Going forward, the ability of the company to improve its scale of
operations and working capital intensity of operations as well as
any debt funded capital expenditure will remain critical for its
debt coverage indicators and hence would be the key rating
sensitivities.
Anirudh Texchem Private Limited is engaged into manufacturing and
trading of fabrics. The fabrics are manufactured in various blends
like Polyester Viscose, 100% polyester, Poly cotton, Polywool etc.
Incorporated in 2005, ATPL is managed by Mr. Manoj Kamalia, a
third generation entrepreneur and became operational in January
2007. The company's facilities are located at RIICO Growth Center
at Bhilwara (Rajasthan) with a monthly installed capacity to
manufacture 237,000 metres of grey fabric.
Recent Results
The company reported net profit of INR0.13 crores on an operating
income of INR25.76 crore in FY2013 as against net profit of
INR0.18 crores on an operating income of INR18.56 crores in
FY2012.
ASN AGRI: ICRA Reaffirms 'B+' Ratings on INR15.07cr Loans
---------------------------------------------------------
ICRA has reaffirmed the long-term rating for INR15.07 crore
(enhanced from INR12.07 crore earlier) fund-based bank facilities
of ASN Agri Genetic Private Limited at '[ICRA]B+'. ICRA has also
reaffirmed the short-term rating for the company's INR8 crore
(enhanced from INR4 crore earlier) bank facilities at '[ICRA]A4'.
The rating suspension done in September 2013 has been revoked and
the rating has been reinstated at the previous level.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based facility- 13.00 [ICRA]B+ reaffirmed
Cash Credit
Fund-based facility- 2.07 [ICRA]B+ reaffirmed
Term Loans
Non-fund based 3.00 [ICRA]A4 reaffirmed
facility-Bank
guarantee
Fund-based facility- 5.00 [ICRA]A4 reaffirmed
Pledge loan
The ratings continue to be constrained by the highly working
capital intensive nature of ASN Agri's operations which together
with a concentrated product portfolio makes its profitability
vulnerable to volatile and adverse fluctuations in commodity
prices as reflected in a decline in company's operating
profitability reported during FY13 because of sharp volatility in
soybean prices. The low profitability is also driven by high
competition in the business and commoditized nature of the product
due to dependence on breeder seeds from agricultural universities
given the limited in-house research capabilities. Further, the
ratings also continue to factor in ASN Agri's modest scale of
operations and its highly leveraged capital structure which
necessitates infusion of fresh capital to support growth going
forward.
The ratings, however, continue to derive strength from the
relevant experience of ASN Agri's promoters in the seeds business
and their established relationships with a wide farmer-base which
facilitates the seed re-production process. Further, the company's
established brand and a widespread sales and distribution network
enable it to compete in an intensely competitive and fragmented
market. The risk of increased concentration of revenues on top few
customers is also mitigated to an extent by the presence of a
fairly diversified and regularly churning client-base which
reduces the off-take risk for company's products. While
reaffirming the ratings, ICRA has also factored in the favorable
growth potential for the hybrid seeds market in India which is
expected to drive company's growth going forward.
In ICRA's view, ASN Agri's ability to diversify its product
portfolio so as to reduce the concentration risk as well as
increase its scale of operations; enhance resistance to adverse
movements in commodity prices by prudent working capital
management; strengthen its capital base; and get timely
enhancement of its working capital facilities to support growth,
will be the key rating sensitivity.
Incorporated in 1995 by Mr. Radheyshyam Patidar, ASN Agri Genetic
Private Limited is an Indore (Madhya Pradesh) based company
engaged in processing and trading of seeds. Company's product
portfolio mainly comprises of soybean and wheat seeds which
together accounted for ~ 100% of its revenues in FY13. Besides
these, the company also trades in cotton seeds on a limited scale.
ASN Agri procures hybrid breeder seeds from agricultural research
centers and institutions and sells them to various farmers for
sowing and reproduction. It then purchases the seeds from these
farmers. The process is repeated through four stages (Breeder
Seeds - Foundation Seeds Stage I - Foundation Seeds Stage II -
Certified Seeds Stage I - Certified Seeds Stage II). The seeds
finally procured for sale (mainly Certified Seed Stage I and II)
are processed by fumigating and cleaning and graded based on
quality.
BHABANI OFFSET: ICRA Assigns 'D' Ratings to INR11.1cr Loans
-----------------------------------------------------------
ICRA has assigned an '[ICRA]D' rating to the INR2 crore term loan
and INR9.1 crore non fund based facility of Bhabani Offset Private
Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 2.0 [ICRA] D Assigned
Non Fund Based 9.1 [ICRA] D Assigned
The rating takes into consideration the recent delays in servicing
of debt obligations by BOPL, a weak financial profile of the
company as characterised by low net margins and an adverse capital
structure, high creditor funding aggravating the financial risk
profile, and BOPL's small scale of operations. The rating takes
into account the large experience of the promoters in the printing
business by the virtue of operating other companies in the similar
line of business and comfortable debt coverage indicators.
BOPL was incorporated in 2010 at Guwahati, Assam by the Dev family
and commenced operations from April 2012. The company has printing
facilities for books, exercise books, diaries etc. BOPL has also
taken the printing facilities of one of the group entity on rent.
Recent Results
BOPL reported a net profit of INR 0.36 crore during FY13 on an OI
of INR 17.96 crore, the first year of its operations.
DSM SOFT: CRISIL Reaffirms 'D' Ratings on INR106.8MM Loans
----------------------------------------------------------
CRISIL's ratings on the bank facilities of DSM Soft (P) Ltd
continue to reflect instances of delay by DSM in servicing its
debt, due to weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10.00 CRISIL D (Reaffirmed)
Packing Credit 40.00 CRISIL D (Reaffirmed)
Working Capital 34.10 CRISIL D (Reaffirmed)
Term Loan
Proposed Long-Term 17.70 CRISIL D (Reaffirmed)
Bank Loan Facility
Bank Guarantee 5.00 CRISIL D (Reaffirmed)
The ratings also reflect DSM's weak financial risk profile, marked
by its weak capital structure. The rating also factors in the
exposure to risks related to customer concentration in the
company's revenue profile and to fluctuation in foreign exchange
rates. However, DSM benefits from its established market presence
in the information technology (IT) sector.
DSM was incorporated in Chennai (Tamil Nadu) in 1991. The company
provides IT services to service providers operating in the
engineering data conversion and geographic information system
segments. DSM has a wholly-owned UK-based subsidiary, DSM Geodata
Ltd (DGL). The company acquired DGL in 2002, to enter the European
market
DSM reported a profit after tax (PAT) of INR13.2 million on net
sales of INR108.5 million for 2012-13 (refers to financial year,
April 1 to March 31) vis-…-vis a PAT of INR20.4 million on net
sales of INR106.3 million for the previous year.
GURUKRUPA METALS: ICRA Reaffirms 'B-' Rating on INR10cr Loan
------------------------------------------------------------
The rating of '[ICRA]B-' has been reaffirmed for the INR10.00
crore cash-credit facility of Gurukrupa Metals.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 10.00 [ICRA]B- reaffirmed
Facility
The reaffirmation of rating continues to takes into account the
weak financial profile characterized by modest profitability
indicators, adverse capital structure and weak debt protection
metrics along with high working capital intensity and tight
liquidity position as reflected by almost full utilisation of cash
credit facility. The assigned rating also takes into account the
lack of diversification in product profile and the risks arising
out of volatility in brass prices as well as vulnerability to
foreign exchange rate fluctuations due to reliance on imports for
procurement. While assigning the rating, ICRA has also noted the
risks of capital withdrawals that are inherent in partnership
firms.
However, the rating draws comfort from the experience of the
promoters in the non-ferrous metals industry as well as the
established relationships of the promoters with suppliers and
customers.
Incorporated in May 2011 as a proprietorship firm by Mr. Ramgopal
O. Maheshwari, GM is a metal merchant based out of Jamnagar,
Gujarat. The firm commenced the trading operations in September
2011 and has been involved in the business of trading of non-
ferrous metal scrap, mainly brass scrap. The firm caters to the
domestic market, particularly Jamnagar and surrounding areas.
Recent Results
For the year FY 2013, the firm reported an operating income of
INR70.18 crore and profit after tax of INR3.01 crore as against
operating income of INR12.00 crore and profit after tax of INR0.55
crore during FY 2012.
HARSORIA HOSPITALITY: ICRA Assigns 'B' Rating to INR10.5cr Loans
----------------------------------------------------------------
ICRA has assigned the long term rating of '[ICRA]B' to INR10.50
crore fund based bank limits of Harsoria Hospitality.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term: Fund 10.50 [ICRA]B/ assigned
Based Limits
The assigned rating takes into account the favorable location of
the banqueting cum restaurant facility being set by the firm in
Sector 5, Panchkula (Haryana) which is a commercial area with easy
accessibility from the residential areas of the city and thus
provides access to a large catchment area. The funding risk for
the project is low as the entire bank debt for the project has
been sanctioned and ~80% of the total committed capital from the
partners have already been infused as on September 30, 2013. While
the project funding mix and maturity profile of the debt is
comfortable with project gearing of 1.05 times and term loan
repayment tenure of 8 years (10 years including moratorium), the
moratorium on the debt repayments (repayment starting from
June 1, 2015) from the scheduled date of project completion
(October 2014) is limited. Moreover, while the entire land payment
has been made, the project is in initial stage of implementation
with only 21% of the total project cost (excluding land cost)
incurred as on September 30, 2013. As a result, timely
commencement of the operations and achieving adequate operating
metrics (occupancies and rates) would be critical for generating
sufficient accruals for the debt servicing and would thus be the
key rating sensitivities.
The assigned rating is also constrained by the lack of prior
experience of the partners in the hospitability sector and the
partnership nature of the firm which besides limiting the
financial flexibility also results in risk related to withdrawal
of capital by the partners.
Harsoria Hospitality is a partnership firm which was formed in
March 2013 and is setting up a banquet-cum-restaurant facility in
Sector 5, Panchkula (Haryana) which is scheduled for completion in
October 2014. This is the first hospitality project of the
partners (Mr. Puneet Gupta, Mr. Munish Mittal and Mrs. Shashi
Gupta) who had been engaged in stone crushing, construction and
production of aloe-vera juices & gel.
ISPAT ALLOYS: CRISIL Lowers Ratings on INR140MM Loans to 'D'
------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Ispat Alloys India Pvt Ltd to 'CRISIL D' from 'CRISIL
B+/Stable', and assigned its 'CRISIL D' rating to the company's
short-term bank facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Packing Credit 20 CRISIL D (Downgrade from
'CRISIL B+/Stable')
Term Loan 120 CRISIL D (Downgrade from
'CRISIL B+/Stable')
The rating downgrade reflects IAIPL's delay in repayment of its
term loan; the delay was due to the company's weak liquidity. The
company's term loan is to be repaid in quarterly instalments of
INR0.50 million each; the instalment due on October 31, 2013, was
outstanding as on November 27, 2013.
IAIPL's weak liquidity is driven by its working-capital-intensive
nature of operations as evident from its fully utilised bank
limits of INR155 million and frequent ad hoc limits availed. Its
liquidity has weakened over the past six months because of
increasing working capital requirements as it received new orders
during January to April 2013. Although IAIPL's packing credit
limit was enhanced to INR80 million from INR50 million in October
2013, its liquidity is expected to remain stretched as it has
certain orders to be executed by December 2013 and by February
2014, keeping its working capital requirements high.
IAIPL is exposed to risks associated with the nascent stage of its
operations. Moreover, it has highly working-capital-intensive
operations, and its profitability is susceptible to volatility in
raw material and power prices. However, the company benefits from
its promoters' extensive experience in the ferroalloys industry.
IAIPL was established in 2008-09 (refers to financial year,
April 1 to March 31) by Mr. Rajiv Gupta. The company manufactures
ferromanganese, ferrosilicon, and silico manganese alloys. Its
manufacturing unit is in Deogarh district (Odisha).
IAIPL reported a profit after tax (PAT) of INR3.9 million on net
sales of INR763.8 million for 2012-13, vis-a-vis a PAT of INR1.5
million on net sales of INR101.8 million for 2011-12.
KARIKALI AMMAN: ICRA Assigns 'B' Ratings to INR16.67cr Loans
------------------------------------------------------------
ICRA has assigned long-term rating of '[ICRA]B' to the INR7.17
crore term loan facilities and the INR9.50 crore fund based
facilities of Karikali Amman Spinning Mills Private Limited. ICRA
has also assigned short-term rating of '[ICRA]A4' to the INR5.00
non fund based facilities of KSMPL. For the INR0.82 crore
unallocated facilities, rating of [ICRA]B or [ICRA]A4 would apply
depending on the tenor of the facility availed.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan facilities 7.17 [ICRA]B assigned
Fund based facilities 9.50 [ICRA]B assigned
LT /ST facilities 0.82 [ICRA]B/[ICRA]A4
(proposed) assigned
Non-fund based 5.00 [ICRA]A4 assigned
facilities
The rating considers the experience of the promoters in the
industry and the recent improvement in the Company's performance
supported by favorable demand environment and improvement in
product mix aided by increasing proportion of finer counts and
blended variety of yarn. ICRA also takes into account the recent
measures undertaken by the management to secure power supplies
which is expected to support uninterrupted production over the
near to medium term and consequently aid in meeting the
anticipated healthy demand from domestic and export markets.
The ratings are, however, constrained by the Company's present
small scale of operations, KSMPL's present modest financial
profile characterised by aggressive gearing, thin profitability
and high working capital intensity. The Company's profit margins
are also vulnerable to volatility in cotton and domestic yarn
prices, especially considering the limited pricing flexibility on
account of the commoditized nature of product. Given annual
repayments of ~Rs. 3.0 crore over the next two fiscals, ability of
the Company to sustain volume and profit growth would be crucial
to generate sufficient cash flows to ensure timely debt servicing.
KSMPL is a small scale spinning company based out of Erode, Tamil
Nadu. KSMPL largely focuses in the medium to finer counts range of
yarn (31-60s, both combed and carded varieties) and markets its
products in India, Sri Lanka and China. KSMPL largely caters to
the requirements of weavers in North western and Eastern parts of
India. The Company has a modest capacity of 28,512 spindles and
400 rotors and primarily manufactures polyester and blended cotton
yarn with limited product diversification. KSMPL is managed by the
promoter's son (Mr. M. Karthikeyan).
Recent Results
The Company reported net profit of INR1.0 crore on an operating
income of INR41.3 crore during the financial year 2012-13, against
net loss of INR0.1 crore on an operating income of INR52.6 crore
for the financial year 2011-12.
KMB TRADING: CRISIL Reaffirms 'B-' Ratings on INR265MM Loans
------------------------------------------------------------
CRISIL's ratings on KMB Trading Corporation Private Limited's bank
facilities continue to reflect its below-average financial risk
profile, marked by high gearing and weak debt protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 60 CRISIL B-/Stable (Reaffirmed)
Corporate Loan 25 CRISIL B-/Stable (Reaffirmed)
Funded Interest
Term Loan 41.5 CRISIL B-/Stable (Reaffirmed)
Long-Term Loan 127.3 CRISIL B-/Stable (Reaffirmed)
Proposed Long-Term
Bank Loan Facility 11.2 CRISIL B-/Stable (Reaffirmed)
The ratings also factor in the company's relatively small scale of
operations and large working capital requirements. These rating
weaknesses are partially offset by the extensive experience of
KMB's promoters in the granite industry and its established
relationships with its customers.
Outlook: Stable
CRISIL believes that KMB will continue to benefit over the medium
term from the industry experience of its promoters. The outlook
may be revised to 'Positive' in case of significant and
sustainable increase in KMB's revenue and profitability following
stabilisation of operations at its proposed facility, and a
consequent increase in accruals, leading to significant
improvement in its financial risk profile, especially its
liquidity. Conversely, the outlook may be revised to 'Negative' if
KMB faces any further delay in the commencement of operations or
reports less-than-expected margins, thereby adversely affecting
its debt servicing ability.
Update
KMB's revenue of INR120 million during 2012-13 (refers to
financial year, April 1 to March 31) is broadly in line with
CRISIL's expectation. Revenue has remained small due to delay in
stabilisation of its granite-processing facility, coupled with
non-availability of adequate rough granite blocks for processing.
CRISIL also believes that KMB will report 30 to 40 per cent
revenue growth over the medium term following the stabilisation at
its granite-processing facility and higher sales from real estate
segment customers.
The company's operating profitability during 2012-13 was 47 per
cent, higher than CRISIL's expectation due to better realisation
from sales of processed slabs. CRISIL believes that KMB's margins
will remain at similar levels over the medium term on the back of
higher-margin processing slab business. KMB's financial risk
profile remains below average, marked by highly leveraged capital
structure and weak debt protection metrics. The company's
liquidity is also weak because of its fully utilised bank lines on
account of working-capital-intensive operations and low cash
accruals due to small scale of operation; however, liquidity is
supported by recent re-schedulement of its term loan and sanction
of funded interest term loan.
For 2012-13, KMB reported net loss of INR2.8 million on net sales
of INR120 million; the company reported profit after tax of INR0.4
million on net sales of INR88.2 million for 2011-12.
Set up in 1999 as a partnership firm by Mr. K Shoukath Ali and his
brother, Mr. Yusuff Basha, KMB was reconstituted as a private
limited company in 2010. Headquartered in Salem (Tamil Nadu [TN]),
the company is in the business of quarrying and selling rough
granite blocks. KMB and its group companies, engaged in the same
line of business, own quarries across TN, Karnataka, and Andhra
Pradesh.
LAKSHMI ENTERPRISES: ICRA Reaffirms B+ Ratings on INR15cr Loans
---------------------------------------------------------------
ICRA has reaffirmed the long-term rating at '[ICRA]B+' for
INR15.00 crore fund based limits of Lakshmi Enterprises.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 1.30 [ICRA]B+ reaffirmed
Cash Credit 8.70 [ICRA]B+ reaffirmed
Unallocated Limits 5.00 [ICRA]B+ reaffirmed
Rating Rationale
The reaffirmation of the rating continues to be constrained by the
firm's relatively modest scale of operations restricting economies
of scale and financial flexibility; its low margins due to trading
nature of the business though they improved marginally in FY2013
due to lower cost of purchases; and susceptibility to capital
withdrawal being a partnership concern. The rating is also
constrained by high customer concentration risk as more than 60%
of the revenue is contributed by top 5 customers over the last two
years; increase in working capital intensity of operations in
FY2013 leading to stretched liquidity position and weak capital
structure due to increased working capital borrowings. The tobacco
business is also susceptible to climatic risks affecting tobacco
availability and to regulatory risks associated with tobacco
production & auctioning with India being a signatory of the WHO
mandate of reduction in tobacco production going forward.
However, the rating positively factors in more than two and a half
decade long experience of partners in the tobacco trading
business; established relations of the firm with the customers
resulting in repeat orders; and the stable demand outlook of
tobacco.
Lakshmi Enterprises is a partnership firm incorporated in 1987, to
undertake the business of trading in tobacco. The partners of the
firm are Mr. S. Srihari Rao and his son Mr. S. Kishore Kumar with
60% and 40% stake respectively. The firm procures raw tobacco,
processes it and sells to manufacturers of tobacco products and
the tobacco exporters. The firm conducts its operations from
Prakasam district in Andhra Pradesh which is among the tobacco
growing regions of the state.
Recent Results
In FY2013 the company reported an operating income of INR 40.14
crore and a profit after tax of INR 0.16 crore.
MADHAV COTTON: ICRA Suspends 'B+' Rating on INR25cr Loan
--------------------------------------------------------
ICRA has suspended the [ICRA] B+ rating assigned to the INR25.00
crore long term fund based cash credit limits and [ICRA]A4 rating
to the INR4.00 crore short term fund based sublimit of Madhav
Cotton Ginning and pressing Factory. The suspension follows ICRA's
inability to carry out a rating surveillance in the absence of the
requisite information from the company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 25.00 [ICRA]B+; suspended
CCBD (4.00) ICRA]A4; suspended
Madhav Cotton Ginning & Pressing Factory was established in 1995.
The business is owned and managed by Madhav S Zanjrukiya and his
family members. The factory is located at Botad, Gujarat. MCGPF is
engaged in ginning of raw cotton to produce cotton seeds and
cotton bales. The company deals in S-6 type of cotton. It sells
the cotton bales and cottonseed through brokers.
MANEESH PIPES: ICRA Reaffirms 'B+' Ratings on INR9.38cr Loans
-------------------------------------------------------------
ICRA has reaffirmed the '[ICRA]B+' rating earlier assigned to the
INR5.88 crore. ICRA has reaffirmed the '[ICRA]B+' rating earlier
assigned to the INR5.88 crore fund-based limits (enhanced from
INR5.38 crore) and INR3.50 crore non-fund based limits (reduced
from INR4.00 crore) of Maneesh Pipes Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 5.10 [ICRA]B+ reaffirmed
Term Loan
(Proposed) 0.78 [ICRA]B+ reaffirmed
Bank Guarantee 3.50 [ICRA]B+ reaffirmed
Unallocated Nil [ICRA]B+ reaffirmed
The rating reaffirmation draws comfort from the satisfactory track
record of the company in executing water supply contracts, and
company's status as L-1 bidder in various contracts from Public
Health Engineering Department, Chhattisgarh which shall improve
revenue visibility if secured.
The rating, however, is constrained by the low order inflow in the
past one year which has led to further decline in revenues
(reduced to INR17.9 crore in FY13 from INR25.0 crore in FY12). The
reduced order backlog of INR10.46 crore (0.58 times of FY13
revenues) also aggravates the concerns regarding future revenue
visibility. The rating also factors in its weakened financial
profile as a result of stretched receivable days, modest
profitability and increased gearing on account of high interest
bearing unsecured loans raised to meet the funding requirements.
Proposed term loan for the completion of reinforced cement
concrete (RCC) pipes unit is expected to result in increased debt
servicing obligations in the future. Inflow of new orders, timely
receipt of payments for work done and completion and stabilization
of operations at the proposed RCC unit would be the key rating
sensitivities going forward.
Maneesh Pipes Private Limited was established with the core
business of manufacturing steel cylinder pipe with concrete lining
and coating, which are widely used for conveying raw water and
drinking water. The company has a manufacturing facility at Raipur
equipped with testing facilities as per IS 1916. The company later
moved on to turnkey execution of water supply contracts, which is
now the major contributor to revenues. MPPL is also establishing a
RCC (Reinforced cement concrete) pipes manufacturing unit which is
expected to be operational in Q4FY14. RCC Pipes are known for high
performance, reliability, durability and heavy load bearing and
are used by various government bodies or construction companies
for sewerage, storm water drainage, road culverts, under railway
tracks, and highways.
Recent Results
In FY13, MPPL has reported a profit after tax (PAT) of INR0.16
crore on an operating income (OI) of INR17.93 crore compared to
PAT of INR0.56 crore on an OI of INR25.01 crore in FY12.
MATOSHRI PRATISHTHAN: ICRA Assigns 'D' Ratings to INR8cr Loans
--------------------------------------------------------------
ICRA has assigned a rating of '[ICRA]D' for INR8.00 crore bank
limits of Matoshri Pratishthan.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund 5.83 [ICRA]D Assigned
Based Limit-
Term Loan
Unallocated 2.17 [ICRA]D Assigned
Limit
The assigned rating takes into account the trust's delays in
servicing of debt in the past six months due to delay in fee
reimbursement of reserved category students from the state
government reflecting its stressed liquidity position. The rating
also factors in the weak financial profile, as reflected by low
profitability, leveraged capital structure and stressed coverage
indicators. Further, the liquidity and capital structure is
expected to remain under pressure as the trust has incurred
substantial initial capital expenditure and will continue to incur
regular subsequent expenditure to retain tax-free status. The
rating is also constrained by the highly regulated Indian
education industry which requires various governmental approvals
for addition of new courses and seats, and the intense competition
in the education sector coupled with limited brand visibility on
account of no track record.
However, the rating takes comfort from the diversified portfolio
of courses offered by the trust through its various institutes and
the stable revenue aided by predictable fee generation during the
course period.
Matoshri Pratishthan was established in the year 2009 and is
running three institutes in an integrated campus in Nanded:
Vishwabharti Polytechnic Institute (VPI), School of Engineering
and School of Management. The engineering and management
institutes are affiliated to Swami Ramanand Teerth
Marathwada(SRTM) University in Nanded while VPI is affiliated to
Directorate of Technical Education, Maharashtra.
Recent results
During the financial year 2012-13, MP registered a profit after
tax (PAT) of INR0.28 crore on an operating income of INR11.94
crore.
MUNEER ENTERPRISE: ICRA Reaffirms 'B+' Rating on INR5.75cr Loans
----------------------------------------------------------------
ICRA has re-affirmed the long-term rating of '[ICRA]B+' to the
INR5.75 crore (enhanced from INR5.00 crore) long-term fund based
facilities of Muneer Enterprise Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-Term Fund 5.75 [ICRA]B+/re-affirmed
Based Limits
The re-affirmation of the ratings continue to factor promoters'
long standing presence in the dealership business and exclusive
nature of dealership of Maruti Suzuki India Limited for Hospet,
Gangavathi and Raichur district in Karnataka leading to relatively
lower competitive intensity. The company's volumes during 2012-13
have been supported by MSIL's strong market share and market
leadership in the domestic passenger vehicles industry, the recent
successful new launches from MSIL like Ertiga coupled with robust
demand for MSIL's existing mini and compact segment models like
Swift and Dzire.
The rating is however constrained by the thin margins, moderate
bargaining power and high working capital requirements in the
automobile dealership business. The ratings also take into account
the company's moderate financial profile as reflected in its thin
profitability and moderate debt protection metrics owing to low
cash accruals, stiff competition from other passenger car dealers
(for other OEMs) and the company's exposure to inherent
cyclicality of the automobile industry. The weak demand conditions
in the domestic market (attributed to high interest rates and fuel
prices) is likely to maintain pressure on the company's revenue
growth and profitability in the near term. Going forward, the
company's ability to improve its capital structure, debt
protection metrics and strengthen its cash accruals would remain
the key rating sensitivities.
Established in 2005, Muneer Enterprise Private Limited is a part
of 50 year old Muneer Group having presence in manufacturing,
dealerships and mining business. The Group was started in 1960 by
late Mr. Muneer Ahmed and three other members of Ahmed family -
Mr. Aleem S Ahmed, Mr. Syed Nazimuddin and Mr. Syeda Muktarunnisa.
Presently, the business operations for the entire group are looked
after by Mr. Syed Nazimuddin and second generation of the entire
promoter's family. The Group has presence primarily in
manufacturing of tractor drawn agricultural implements (such as MB
ploughs, Harrow cum Levelers, paddy disc and harrows etc.), iron
ore mining and trading and dealerships for construction equipments
(Escorts and Hyundai), tractors (John Deere), passenger cars
(Maruti), automobile parts (Bosch) and trucks & buses (Mahindra
Navistar). Muneer Enterprise Private Limited is dealer for Maruti
passenger cars with three sales cum service centres located at
Hospet, Raichur and Gangavathi.
Recent Results
For 2012-13, the company reported an operating income of INR52.8
crore with a profit after tax (PAT) of INR0.2 crore as against an
operating income of INR44.1 crore with a net loss of INR0.2 crore
during 2011-12.
NEELMANI DEVELOPERS: ICRA Reaffirms 'B' Rating on INR6cr Loan
-------------------------------------------------------------
ICRA has reaffirmed the '[ICRA]B' rating to the INR6.00 crore Cash
Credit facility of Neelmani Developers.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 6.00 [ICRA]B reaffirmed
The rating continues to factors in experience of the promoters of
~20 years in real estate project development, receipt of all the
approvals. The project has received healthy bookings for the phase
I which has been completed and the same is reflected in
comfortable advances position. The rating however remains
constrained by high drawings by partners which have put pressure
on capital structure, limited scale of operations and limited
record in large sized project development. ICRA notes that the
project also faces execution risk to the extent of remaining
construction work. Going forward, ND's ability to tie up the sales
at adequate rates in timely manner and keeping high collection
efficiency will remain key rating sensitivity factors.
ND has been established in 2011 in order to develop residential
and commercial real estate projects. Though the firm is new, the
promoters have executed around 15 projects in the past in
Ratnagiri region, where the total area sold was around 5.31 Lakh
sq ft. Currently the group is developing a total area of 6.67 Lakh
sq ft apart from the 'Narendra Nano City' project. The promoters
have experience of ~20 years in real estate and construction
business.
NEVATIA STEEL: ICRA Reaffirms 'B-' Rating on INR0.5cr Loan
----------------------------------------------------------
ICRA has reaffirmed the long term rating of '[ICRA]B-' assigned to
the INR0.50 crore fund based bank facility and a short term rating
of '[ICRA]A4' to the INR23.50 crore fund based and non fund based
facility of Nevatia Steel & Alloys Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund 0.50 [ICRA]B- Reaffirmed
Based Limits-
Cash Credit
Short Term Fund 13.25 [ICRA]A4 Reaffirmed
Based Limits-
EPC/PCFC
Fund Based limits- 1.54 [ICRA]A4 Reaffirmed
Unallocated
Short Term Non 8.71 [ICRA]A4 Reaffirmed
Fund Based Limits-
LC/ BG/ Forward
Contract
The ratings reaffirmation continues to factor in the company's
weak financial risk profile characterized by, thin profitability,
highly leveraged capital structure and stretched liquidity
position. The ratings are further constrained by susceptibility to
slowdown in economic conditions, vulnerability of profits to any
adverse currency fluctuations as well as stiff competition from
organized & unorganized players exerting pressure on margins. The
ratings also reflect the company's high geographic concentration
and exposure to regulatory risks with regards to changes in export
incentives structure.
The ratings however consider experience of promoter group in
stainless steel business along with the company's established
relationship with its suppliers and customers.
NSAPL, an ISO 9001:2008 accredited company, was incorporated in
the year 1988 by Mr. Sharad Kumar R. Nevatia. The company is
engaged in manufacturing of stainless steel wires & bright bars
and to a lesser extent welding wires from SS rods. NSAPL has its
registered office at Worli, Mumbai.
Recent Results
During 2012-13, the company has reported a profit after tax (PAT)
of INR0.01 crore on an operating income of INR93.28 crore and a
net profit of INR0.09 Cr on an operating income of INR31.67 Cr for
the six months ending Sept. 30, 2013.
P.K. SULPHIKER: CRISIL Reaffirms B+ Rating on INR70MM Loan
----------------------------------------------------------
CRISIL's rating on the bank facility of P.K. Sulphiker continue to
reflect the firm's modest scale of operations in an intensely
competitive civil construction industry, geographic concentration
in revenue profile, large working capital requirements, and
susceptibility to volatility in raw material prices. These rating
weaknesses are partially offset by the extensive industry
experience of PKS's proprietor and his funding support, and the
firm's moderate financial risk profile in spite of large working
capital requirements, marked by low gearing.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 70 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that PKS will benefit from its proprietors'
extensive industry experience. The outlook may be revised to
'Positive' in case the firm significantly ramp up its scale of
operations while ensuring efficient working capital management.
Conversely, the outlook may be revised to 'Negative' if the firm's
credit risk profile deteriorates owing to lower-than-expected cash
accruals or larger-than-expected working capital requirement or
debt-funded capital expenditure (capex).
Update
During 2012-13 (refers to financial year, April 1 to March 31),
PKS had operating income of INR121 million, lower than CRISIL's
expectations. This was on account of delays in execution of some
of the projects due to adverse weather conditions at project
sites. Consequently, the firm reported lower-than-expected net
cash accruals of INR5 million during the year. However, the firm
benefits from its moderate financial risk profile, marked by low
gearing. Though the firm's operations are highly working capital
intensive, driven by high debtor and inventory days, large part of
its working capital requirements is funded through promoters'
contribution. This has resulted in low external borrowings,
resulting in low gearing. The firm's liquidity profile is marked
by high average month-end bank limit utilisation at 93 per cent
for the 12 months ended September 2013. However, the firm benefits
from the absence of any term loan repayment obligation; also, it
has no large debt-funded capex plans.
PKS was set up as a proprietorship firm in 1993 by Mr. P K
Sulphiker. The firm undertakes civil construction activities,
including construction and improvements of roads and bridges in
Kerala.
PKS reported a profit after tax (PAT) of INR3.7 million on an
operating income of INR121.1 million for 2012-13, as against a PAT
of INR3.8 million on an operating income of INR96.4 million for
2011-12.
PARMESHWARI SILK: ICRA Reaffirms B+ Rating on INR21cr Loan
----------------------------------------------------------
ICRA has reaffirmed the long-term rating at '[ICRA]B+' and the
short-term rating at '[ICRA]A4' for INR24.55 crore (enhanced from
INR20.75 crore) fund based and non-fund based facilities of
Parmeshwari Silk Mills Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Fund 21.00 [ICRA]B+ Reaffirmed/assigned
Based Limits
Long-term/Short- 3.55 [ICRA]B+/[ICRA]A4 Reaffirmed
term Limits
(interchangeable)
The rating reaffirmation takes into account the company's
continued weak debt coverage metrics which is on account of modest
profitability and high leverage. The fragmented nature of the
industry limits the pricing power, given the modest scale and
positioning of the company, which has kept the profitability and
accruals modest. This coupled with working capital intensive
nature of the business and regular capital expenditure incurred by
the company for modernization and expansion has kept the reliance
on debt high, resulting in weak debt coverage and liquidity. The
relatively large debt funded capital expenditure being undertaken
by the company during FY2014 for upgradation and expansion of the
in-house installed capacity would keep the financial profile
stretched going forward, as the accruals are expected to remain
modest. Notwithstanding the above concerns, the rating continues
to factor in the long track record of the company in marketing of
dress material in the domestic market with in-house weaving and
embroidery facilities and the satisfactory capacity utilization
levels which have increased over the years, resulting in steady
revenue growth.
Going forward, the ability of the company to optimally utilize the
enhanced capacity and improve the profitability margins will be
critical for future cash accruals and debt servicing and thus
would be the key rating sensitivities.
PSML was incorporated in 1993 and is engaged in selling of
shirting fabric and ladies dress material under its brand Ramtex.
The company has in-house manufacturing capacity for weaving,
embroidery and digital printing in Ludhiana (Punjab) and has 74
looms (weaving capacity of 32 lac meters per annum), 45 embroidery
machines and 2 digital printing machines as on
March 31, 2013.
During FY-2013, the company reported Profit After Tax (PAT) of
INR0.51 crore with an Operating Income (OI) of INR63.9 core as
compared to PAT of INR0.51 crore and OI of INR55.1 crore for the
previous financial year.
PERODY BUILDERS: CRISIL Assigns 'B+' Rating to INR50MM LT Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of Perody Builders Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 50 CRISIL B+/Stable
Bank Loan Facility
The rating reflects PBPL's susceptibility to risks related to the
completion and saleability of its ongoing real estate residential
projects in Bengaluru (Karnataka), and to cyclicality in the
Indian real estate industry. These rating weaknesses are partially
offset by the extensive experience and established track record of
PBPL's promoters in the residential real estate development
business.
Outlook: Stable
CRISIL believes that PBPL will continue to benefit over the medium
term from the extensive experience of its promoters and its
established track record in the real estate industry. The outlook
may be revised to 'Positive' if the company achieves earlier-than-
expected completion and sale of its projects, leading to an
improvement in its financial risk profile. Conversely, the outlook
may be revised to 'Negative' if there are any delays in project
completion or in receipt of advances from customers, or if PBPL
undertakes a larger-than-expected debt-funded project, leading to
deterioration in its financial risk profile.
Established in 2001, PBPL is involved in the construction and sale
of residential real estate in Bengaluru. The company is promoted
by Mr. P Ramakantha Shetty and his family.
For 2012-13 (refers to financial year, April 1 to March 31), PBPL
reported a profit after tax (PAT) of INR6.7 million on net sales
of INR83.7 million, as against a PAT of INR40.2 million on net
sales of INR83.6 million for 2011-12.
PLASCARE INDUSTRIES: CRISIL Reaffirms D Ratings on INR400MM Loan
----------------------------------------------------------------
CRISIL's rating on the bank facilities of Plascare Industries
Private Limited continues to reflect the delays by Plascare in
servicing its term loan; the delay has been caused because of
Plascare's weak liquidity marked by weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 13.5 CRISIL D (Reaffirmed)
Cash Credit 110.0 CRISIL D (Reaffirmed)
Letter of Credit 40.0 CRISIL D (Reaffirmed)
Long-Term Loan 200.0 CRISIL D (Reaffirmed)
Proposed Long-Term
Bank Loan Facility 36.5 CRISIL D (Reaffirmed)
Plascare also has a below average financial risk profile marked by
weak debt protection metrics. It also has customer concentration
risk in its revenue profile and is also susceptible to volatility
in raw material prices. However, Plascare benefits from its
promoters' extensive industry experience and its healthy
relationships with its customers.
Plascare was set up in 2004 by Mr. S Khosla and Mr. R Vasan. The
company manufactures polycarbonate bottles, polypropylene
closures, and polyethylene terephthalate preforms and closures.
Plascare reported a net loss of INR15.9 million on net sales of
INR328.2 million in 2012-13 (refers to financial year, April 1 to
March 31), against a net loss of INR33.8 million on net sales of
INR379.2 million for 2011-12.
REGALIA BUILDTECH: ICRA Suspends 'D' Rating on INR50cr Loan
-----------------------------------------------------------
ICRA has suspended the '[ICRA]D' rating to term loan limit of
INR50.0 crore of Regalia Build Tech & Services Private Limited.
The suspension follows ICRA's inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
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.
S.S. OVERSEAS: CRISIL Reaffirms 'B' Ratings on INR180MM Loans
-------------------------------------------------------------
CRISIL's rating on the bank facilities of S.S. Overseas (part of
the SS group) continues to reflect the SS group's weak financial
risk profile, marked by high gearing, a small net worth and weak
debt protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 160.0 CRISIL B/Stable (Reaffirmed)
Proposed Long-Term
Bank Loan Facility 10.0 CRISIL B/Stable (Reaffirmed)
Term Loan 10.0 CRISIL B/Stable (Reaffirmed)
The rating also factors in the group's large working capital
requirements, small scale of operations, and susceptibility to
regulatory changes, vagaries of the monsoon, and volatility in raw
material prices and foreign exchange rates. These rating
weaknesses are partially offset by the extensive experience of the
group's promoters in the rice processing industry, and the healthy
growth prospects for the industry.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of SSO and SS Agro (SSA), together
referred to as the SS group. This is because the two firms are in
the same line of business, with common promoters and management,
and have strong financial linkages. Also, the firms have provided
guarantees for each other's bank lines.
Outlook: Stable
CRISIL believes that the SS group's financial risk profile will
remain weak over the medium term because of its large working
capital requirements and small net worth. The outlook may be
revised to 'Positive' if the group reports a significant
improvement in its operating revenues and profitability, while
efficiently managing its working capital requirements, leading to
improvement in its overall financial risk profile. Conversely, the
outlook may be revised to 'Negative' if the SS group's operating
margin declines significantly, leading to lower-than-expected cash
accruals, or if it undertakes a large, debt-funded capital
expenditure programme, thereby adversely affecting its overall
financial risk profile.
The SS group, based in Jalalabad, district Bhatinda (Punjab), is
managed by Mr. Pravesh Kumar and his brothers. Both SSA and SSO
are engaged in processing and sale of basmati rice. The group was
primarily engaged in processing of non-basmati rice (parmal) till
2007-08, and started processing basmati rice on a job-work basis
from the second half of 2008-09. The group commenced its
operations for processing of basmati rice on its own account
during the first half of 2010-11.
The SS group reported a profit after tax (PAT) of INR4.4 million
on net sales of INR862.2 million for 2012-13; it had reported a
PAT of INR3.4 million on net sales of INR739.5 million for 2011-
12.
SACHINAM TRAVELS: CRISIL Suspends 'B' Ratings on INR120MM Loans
---------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of Sachinam
Travels Pvt. Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 95 CRISIL B/Stable Suspended
Proposed Long-Term 25 CRISIL B/Stable Suspended
Bank Loan Facility
The suspension of ratings is on account of non-cooperation by STPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, STPL is yet to
provide adequate information to enable CRISIL to assess STPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
STPL was incorporated in 1989 and is in the business of providing
air-ticketing services (it is an IATA -certified agent) and
organising holiday packages (tours and travels). Currently, around
75 per cent of its revenues come from the air-ticketing segment
and the rest from tours and travels. The company is promoted by
Mr. Mukesh Dand.
SAI ENTERPRISE: CRISIL Suspends 'B+' Rating on INR200MM Loan
------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of Sai
Enterprise.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 200 CRISIL B+/Stable Suspended
The suspension of ratings is on account of non-cooperation by Sai
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, Sai is yet to
provide adequate information to enable CRISIL to assess Sai's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
Sai is a partnership firm that undertakes real-estate development
in Bardoli (Gujarat). Sai was set up by Mr. Vipulbhai Undhad and
his friend, Mr. Jayantilal Panchal, and their family members to
undertake construction in Surat. The firm is undertaking a housing
project named Avadh Lake City at Bardoli, comprising 574 houses
spread across around 1.1 million square feet. The total cost of
the project is estimated to be around INR700 million and is
expected to be completed by September 2012.
SANKAR COTTON: ICRA Assigns 'B' Rating to INR20cr LT Loans
----------------------------------------------------------
ICRA has assigned a long term rating of '[ICRA]B' to INR20.00
crore fund based facilities of Sankar Cotton Traders.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund 20.00 [ICRA]B Assigned
Based Limits
The assigned rating is constrained by weak financial profile
characterized by low profitability, high gearing and stretched
coverage indicators. The rating is also constrained by the
vulnerability of turnover and profitability as the availability
and price of raw material is often subject to weather conditions
and government policies; small scale of operations and fragmented
nature of industry with high competition from large number of
players limits the ability to pass on the hike in the input costs.
Further, ICRA also considers inherent risks associated with a
proprietorship firm. However, the rating favorably factors in more
than two decades of experience of the proprietor in cotton trading
that helps in understanding the market trend resulting in
procuring better raw material at competitive rates and the
proximity of ginning unit to cotton growing areas resulting in
lower transportation costs.
The ability of the firm to improve its profitability and continue
to increase its scale of operations would remain the key rating
sensitivities.
Sankar Cotton Traders was setup in the year 2003 by Mr.I.Basavaiah
and is engaged in cotton ginning, pressing and trading of cotton
lint, kappas. The firm is located in Guntur district of Andhra
Pradesh, operating with 18 gins (leased) currently.
SGS JEWELLERY: ICRA Rates INR6cr Fund Based Loans at 'B-'
---------------------------------------------------------
ICRA has assigned a long term rating of '[ICRA]B-' for the INR6.0
crore bank limits of SGS Jewellery Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 6.00 [ICRA]B- assigned
The assigned rating takes into account small scale of jewellery
retailing operations of SGS in a highly fragmented and cost
competitive industry with low profitability levels, its adverse
capital structure with high leverage, weak debt protection
indicators, stretched liquidity profile of the company and the geo
political risks arising from its operations being limited to a
single city. The rating also takes into consideration high working
capital intensity of business arising out of high inventory levels
being maintained by the company, which also exposes its margins to
fluctuations in gold prices. ICRA also take into account the
recent restrictions on gold import which is likely to impact the
availability of gold. The rating however derives comfort from
SGS's experienced promoters, established market position of the
company in the jewellery business and attractive location of the
retail outlet of the company.
SGS Jewellery Private Limited (SGS) was established as a private
limited company in 2009 and is engaged in trading of gold, silver,
diamond & gemstones and precious studded jewellery, etc through
its retail store located on MI Road, Jaipur. The company also
manufactures jewellery, however, in relatively lower volumes. The
company is managed by Mr. Ajay Jain, who has a vast experience in
real estate and Mr. Prakash Chand Dhandia, who has more than 40
years experience in gems and jewellery.
For FY2013, the company reported an operating income of INR15.5
crore and profit after tax of INR0.06 crore as compared to an
operating income of INR20.09 crore and profit after tax of INR0.07
crore in FY2012.
SHIVAM IRON: ICRA Cuts Ratings on INR218.35cr Loans to 'D'
-----------------------------------------------------------
ICRA has revised downwards the long term rating assigned to the
INR45.07 crore term loan and INR118.00 crore fund based working
capital facilities of Shivam Iron & Steel Co. Limited from
'[ICRA]BB+' to '[ICRA]D'. ICRA has also revised downwards the
short term rating assigned to the INR55.28 crore non-fund based
bank facilities of SISCL from '[ICRA]A4+' to '[ICRA]D'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 45.07 [ICRA]D downgraded
(Term Loans)
Fund Based Limits 118.00 [ICRA]D downgraded
(Working Capital
Facilities)
Non Fund Based 55.28 [ICRA]D downgraded
Limits (Working
Capital Facilities)
The downward revision in the ratings primarily take into account
the liquidity tightness faced by the company due to soaring
inventory level, which led to delays in honouring its debt service
obligations. The ratings also consider the cyclical nature and the
ongoing weakness in the steel industry, leading to sub-optimal
level of capacity utilisation of its various units and absence of
any captive source of power, which results in high cost of
operations, since the manufacturing process of some of its
products is power intensive. The financial risk profile of the
company is characterized by low net profitability and depressed
level of coverage indicators. The ratings, however, derive comfort
from the experience of the promoters in the steel industry, its
integrated nature of operations that lead to increase in value
addition in the business and its diversified product portfolio
that mitigates demand risk of a particular product. ICRA notes
that substantial debt servicing obligation may further exert
pressure on the cash flows in the near term if the company is
unable to manage its working capital more efficiently.
Incorporated in 1998, SISCL is engaged in the production of sponge
iron, mild steel (MS)/ stainless steel (SS) ingot and billet, pig
iron, hard coke, MS structural items like angle, channel, bar and
flat, SS flat, and ferro alloys (silico and ferro manganese).
Currently, its sponge iron, ingot/ billet, pig iron, hard coke,
rolling and ferro alloy manufacturing facilities stand at 90,000
metric tonne per annum (MTPA), 108,400 MTPA, 35,000 MTPA, 35,000
MTPA, 69,000 MTPA and 37,400 MTPA respectively. The sponge iron
unit of the company is located at Koderma, Jharkhand and other
manufacturing facilities are located at Giridih, Jharkhand.
Recent Results
During the first half of 2013-14, the company reported a net
profit of INR 1.88 crore (provisional) on an operating income of
INR 111.28 crore (provisional). The company reported a net profit
of INR 2.52 crore on an operating income of INR 281.37 crore in
2012-13.
SILVEX AND COMPANY: CRISIL Suspends B Ratings on INR50MM Loans
--------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Silvex
and Company (India) Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft Facility 30 CRISIL B/Stable Suspended
Packing Credit 150 CRISIL A4 Suspended
Proposed Long-Term 20 CRISIL B/Stable Suspended
Bank Loan Facility
The suspension of ratings is on account of non-cooperation by
Silvex with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, Silvex is yet to
provide adequate information to enable CRISIL to assess Silvex's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
Silvex was promoted by Mr. Arvind Agarwal and his brother, Mr.
Ravindra Agarwal, in 2005. The company manufactures and exports
silver and silver-studded jewellery. Silvex has a state-of-the-art
jewellery design and manufacturing unit in Jaipur (Rajasthan). It
is an export-oriented unit with majority of sales to the USA,
Europe, Australia, and Dubai. During 2010-11 (refers to financial
year, April 1 to March 31), Silvex derived around 84 per cent of
its revenues from export sales, while the remaining came from
domestic sales, mainly to retail showrooms. The company also
launched its silver jewellery brand, Arvino, recently.
STAR TANNERY: CRISIL Suspends 'B' Rating on INR35MM Loan
--------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Star Tannery.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 35 CRISIL B/Stable Suspended
Letter of Credit 20 CRISIL A4 Suspended
The suspension of ratings is on account of non-cooperation by ST
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, ST is yet to
provide adequate information to enable CRISIL to assess ST's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
ST, a partnership firm, was promoted by Mr. Mohammad Arif and
members of his family in 1986. The firm has the capacity to
produce 0.2 million square feet of leather per annum. It facility
is in Kanpur (Uttar Pradesh). It manufactures different types of
leather, such as chrome- and vegetable-tanned.
UTTARAYAN STEEL: CRISIL Suspends 'B-' Ratings on INR73.2MM Loans
----------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
Uttarayan Steel Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 65 CRISIL B-/Stable Suspended
Term Loan 8.2 CRISIL B-/Stable Suspended
The suspension of ratings is on account of non-cooperation by USPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, USPL is yet to
provide adequate information to enable CRISIL to assess USPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
USPL, set up in 2003 by Mr. Ajay Maheshwari, manufactures MS
ingots used in the rolling mills. It uses sponge, scrap iron, and
silicon manganese as raw materials to produce steel billets and
ingots. It has manufacturing capacity of 24,000 tonnes per annum
of steel ingots at its plant in Uttarakhand. The average capacity
utilisation of the plant over the past three years has been over
70 per cent. The company has two blast furnaces; the second one
being recently installed in 2009-10 (refers to financial year,
April 1 to March 31).
VITA GRANITO: CRISIL Suspends 'B+' Ratings on INR354.5MM Loans
--------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Vita
Granito Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 125 CRISIL B+/Stable Suspended
Letter of credit &
Bank Guarantee 41 CRISIL A4 Suspended
Term Loan 229.5 CRISIL B+/Stable Suspended
The suspension of ratings is on account of non-cooperation by VGPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, VGPL is yet to
provide adequate information to enable CRISIL to assess VGPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
Incorporated in 2006, VGPL is based in Morbi (Gujarat) and
manufactures vitrified tiles. The company has installed capacity
to manufacture 9000 boxes per day (around 42,000 tonnes per annum)
of 24'X24' size. VGPL was promoted by Mr. Devendra Patel, Mr.
Bharat Kasundra, Mr. Harjivan Bhadija, Mr. Magan Kasundra, Mr.
Arvind Bhalodia, and Mr. Vipul Bharodia. Around 18 per cent of the
company's ownership is with Sunbeam Ceramics Pvt Ltd.
VORTEX RUBBER: ICRA Assigns 'B-' Rating to INR8cr Cash Credit
-------------------------------------------------------------
ICRA has assigned the long-term rating of '[ICRA]B-' to the INR8.0
crore cash credit facilities of Vortex Rubber Industries (P) Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit Limits 8.0 [ICRA]B- assigned
The assigned ratings take into account the long-standing
experience of Vortex Rubber Industries Private Limited's promoters
in the business of trading imported automotive accessories. The
ratings are, however, constrained by the start-up nature of
operations coupled with the low profitability of the trading
business. The high working capital intensity has put pressure on
cash flows and financial risk profile of the company. Further,
high dependence on imports exposes the company to foreign exchange
fluctuation risk. The same is partially mitigated by a reasonable
pass-through ability of the company. Going forward, the ability of
the company to increase its scale of operations and improve its
financial risk profile will be the key rating sensitivities.
Vortex Rubber Industries Pvt. Ltd. was incorporated in March,
2013. The company is into the trading of passenger car radials
(PCRs) and truck tyres that are primarily imported from China and
additionally procured from domestic market. Currently, VRI has an
office at Ashok Vihar (New Delhi) and three godowns (on rental
basis) in Delhi/NCR. The promoter of the company has been in the
tyre trading business for a long time. Prior to founding VRI, he
was working with Indo Silicon Electronics (P) Ltd. (rated [ICRA]B-
/A4) for the past 20-22 years.
WALIA AGNI: ICRA Reaffirms 'D' Ratings on INR32cr Loans
-------------------------------------------------------
ICRA has reaffirmed the '[ICRA]D' rating to the INR28.00 crore
Term Loan facility and INR4.00 crore Cash Credit facility of Walia
Agni Industries Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 28.00 [ICRA]D reaffirmed
Cash Credit 4.00 [ICRA]D reaffirmed
The rating reaffirmation reflects continued instances of
irregularities in debt servicing by WAIPL. The financial profile
is weak characterized by high gearing and stretched liquidity. The
company has started operations in FY12 and stabilization of
operations is still in progress. Going forward, regularizing debt
servicing, increasing capacity utilization and achieving break
even will remain key sensitivities.
WAIPL is engaged in manufacturing of hot forging components for
automobile industry. The company currently operates as a tier II
supplier for the components which are eventually supplied to
commercial vehicle (CV) OEMs like Tata Motors Limited (TML), Force
Motors, Piaggio etc. Going forward, the company will operate as a
tier I supplier of TML.
Recent Results
WAIPL has reported an operating profit before depreciation,
interest, amortization and tax (OPBDITA) of INR0.2 crore in FY13
on an operating income of INR12.6 crore. The company has reported
net losses of INR4.4 crore during the same period as per the
audited financials.
WEBSOL ENERGY: Faces Liquidation as Orders and Revenues Dwindle
----------------------------------------------------------------
Wall Street Sector Selector reports that Websol Energy System is
facing liquidation.
The company which has a factory near Kolkata has seen its orders
and revenues dwindle as solar system owners found it much cheaper
to source Chinese solar panels, according to Wall Street Sector
Selector. The report relates that the company has failed to
convince its lenders about restructuring through the CDR cell.
The company has INR350 crore of working capital and long term
loans.
The company has got a snowballs chance of paying those loans,
given its business model and scale, the report notes.
While some of the other solar companies have adapted themselves by
becoming turnkey solar suppliers, Websol has not expanded, the
report relates.
The company's website lists only some small projects in West
Bengal, the report adds.
Websol Energy System is a small solar manufacturing company
located in East India.
====================
N E W Z E A L A N D
====================
ASR LTD: Boscombe Reef to Reopen After a Council Gets Payouts
-------------------------------------------------------------
Adam Williams at BBC News reports that Europe's first artificial
surf reef is set to be reopened in April after a council received
two insurance payouts to fund repairs.
The GBP3.2 million structure in Boscombe, Dorset, had to be closed
in 2011 after sandbags were damaged by an unidentified boat's
propeller, according to BBC News. The report relates that
Bournemouth council has now received GBP306,531 from its insurers
after a two-year wait.
The authority is set to commission a firm to carry out the
repairs, BBC News notes.
Made of 55 giant sand-filled bags 740ft (225m) out at sea, the
reef opened in November 2009 after lengthy delays and running over
budget, notes the report.
BBC News discloses that the firm that built the structure, New
Zealand-based ASR Ltd, has since gone into liquidation.
The report notes that the reef has been criticized in the past for
its performance, with some calling for it to be demolished. The
report relates that Bournemouth council first lodged claims with
its insurers Zurich Municipal in April 2011.
'Shifted unexpectedly'
Following a Freedom of Information request by the BBC, the
authority revealed it had received two settlements for the damaged
bags of GBP171,531 and GBP135,000, some of which will help
directly fund repairs, the report discloses.
Tourism Director Mark Smith said it was planned the reef would
reopen in April and help enhance a planned coastal activity park
for the town's seafront between Alum Chine and Southbourne,
approved in October, the report relates.
The council is also registered as an unsecured creditor in
connection with the liquidation of ASR Ltd for GBP14,800, the
report adds.
CHORUS LTD: Likely to "Cut All Discretionary Activity"
------------------------------------------------------
Tom Pullar-Strecker at Stuff.co.nz reports that Chorus Limited
will probably "cut all discretionary activity", including growth-
related capital investment, and re-price most of its commercial
services.
Stuff.co.nz notes that Chorus' share price has plummeted since the
Government admitted last month it did not have the numbers in
Parliament to override a Commerce Commission-ordered $10.54 price
cut for access to its copper network from next December.
According to the report, Chorus chairwoman Sue Sheldon has written
to shareholders to say Chorus' board believed a "full-price
principle" review the company had demanded the commission
undertake, could see the price go back up to "around or even above
current levels".
But she said that in the meantime Chorus could not finalise its
medium term strategy and was assessing its "capital management
options," the report relates.
Stuff.co.nz reports that Chorus chief executive Mark Ratcliffe
told Fairfax Media on Dec. 10 that the company would be up for
industry discussions on the "fine mess" of copper pricing and it
was not a time to take extreme positions.
The report says the Government is understood to have sounded out
some industry players on whether they would be willing to
facilitate talks. However, one of the parties that had been
approached said Chorus might be painting itself into a corner by
advising shareholders the commission's price cut could be
completely reversed.
In another negative development for Chorus, stuff.co.nz reports
that the commission issued a draft ruling on the price Chorus
could charge for connections to its unbundled copper low frequency
service.
According to Stuff.co.nz, Chorus said the ruling, if finalised,
would cut the prices by between 5.8 per cent and 31.1 per cent,
knocking between NZ$5 million and NZ$6 million off its annual
earnings before interest, tax, depreciation and amortisation.
Mr. Ratcliffe responded angrily, saying the draft ruling was "yet
another example of the regulatory framework delivering prices that
are disconnected from real costs," the report adds.
As reported in the Troubled Company Reporter-Asia Pacific on
Nov. 8, 2013, Stuff.co.nz said credit ratings agency Standard &
Poor's expects Chorus will breach its banking covenants within two
years unless it receives help. Stuff.co.nz said that fresh
evidence has emerged both for and against the contention that
Chorus could absorb a NZ$10 reduction in the price it can charge
for copper broadband without government intervention. According
to Stuff.co.nz, Standard & Poor's and Moody's are both reviewing
Chorus's credit ratings after the Commerce Commission on
November 5 ordered a 23 per cent cut in wholesale copper broadband
pricing.
About Chorus Ltd
Chorus Ltd -- http://chorus.co.nz/-- is a telecommunications
utility provider. The Company provides services, such as network
access services, property co-location services, field services and
roadmap of services. The Company's network access services provide
direct access to Chorus local access network. It connects around
1.8 million New Zealand homes and businesses. Its property
portfolio includes local telephone exchanges, roadside cabinets,
mobile masts and radio towers. The Company manages security and
access to its buildings and infrastructure across the country. The
Company installs or repairs end customers' phone or Internet
services. The phone and Internet companies use its network to
deliver services. The Company also provides services to radio
operators or organizations that need wireless communications.
These organizations include TeamTalk, NZ Police, Civil Defense
organizations and broadcasters.
====================
S O U T H K O R E A
====================
AQ ENTERTAINMEN: JYP Entertainment Liquidates Firm
--------------------------------------------------
allkpop.com reports that on Dec. 9, a rep from the business world
of investment banking revealed that JYP Entertainment has decided
to liquidate its sub-label, AQ Entertainment, at the latter's
meeting of shareholders.
Currently, JYP Entertainment is undergoing the liquidation process
of AQ Entertainment, which is known for managing miss A and Baek
Ah Yeon, according to allkpop.com. The report relates that only
these two artists under JYP Entertainment were active under both
JYP and AQ Entertainment.
AQ Entertainment was established in 2008 because at the time, JYP
wanted to secure more diverse content and speed up the decision
making process
The report notes that JYP Entertainment explained, "The
organization relied on AQ Entertainment to manage and make plans
for miss A and Baek Ah Yeon's album, music video production, and
music production."
The report relates that after JYP Entertainment had merged with
unlisted company (not listed on stock market exchange) JYP, it
appeared that there was no need to separately manage a portion of
the sub-labels, which may have led to the liquidation of AQ
Entertainment. JYP Entertainment may have acted upon the point
that it became less effective to manage a company with a dispersed
profit, the report relays.
After the liquidation of AQ Entertainment, miss A and Baek Ah Yeon
will now be solely under JYP Entertainment, the report adds.
SSANGYONG ENGINEERING: Creditor Row Major Setback to Debt Workout
-----------------------------------------------------------------
Yonhap News Agency reports that an intensifying row between
creditors of Ssangyong Engineering & Construction Co. has turned
into a major setback in the builder's long-pending turnaround
efforts, casting a dim outlook on the local construction sector
down the road, bank and industry sources said Dec. 11.
Yonhap notes that South Korea's 13th-largest builder, by
construction capacity, has been placed under debt rescheduling
since June by its creditor banks after suffering a cash shortage
stemming from a property market slowdown.
But the debt workout process hit a snag last week when a Seoul
court accepted the request from one of Ssangyong E&C's creditors
to put a temporary seizure on its accounts worth about
KRW78 billion (US$74.2 million), the news agency relates.
According to the report, the Military Mutual Aid Association, a
non-profit soldiers' welfare organization, had lodged the request
with the Seoul Central District Court on Dec. 4 in a bid to recoup
the money it invested in the builder's project financing.
Yonhap relates that the association has lent the builder
KRW85 billion, with the credit exposure now ballooned to
KRW123.5 billion, including the interest that is on the verge of a
default.
The report says the association's move to retrieve its investment
has angered Ssangyong E&C's creditor banks, including Woori Bank,
which has the biggest exposure, and four others, as the
provisional attachment on its financial accounts will only
exacerbate the stalled debt workout process that has made little
headway for more than a decade.
Yonhap relates that this is the second debt restructuring for the
troubled South Korean builder since 2004, when it ended the first
debt workout after the firm was salvaged with taxpayers' money in
2001 following the Asian financial crisis in the late 1990s.
The government tried to sell Ssangyong E&C through six different
biddings from 2007, as part of its efforts to recoup the public
funds that were injected, but failed due to a lack of buyers, the
report notes.
To avert a bankruptcy, Woori Bank on Dec. 9 asked the association
for a three-year deferment on the principal and interest repayment
and to accept creditor banks' plan to convert debts worth KRW247
billion to equities, but was rejected, according to Yonhap.
The creditor banks held an emergency management meeting to discuss
"how to counteract the military aid association's approach, and
additional liquidity support for the debt-plagued builder," one
official from the banks said, asking not to be named, Yonhap
relays.
But they came up with no concrete solution, with some of the banks
insisting on putting the builder under court receivership while
Woori Bank argued that the company should be delisted from the
stock market as a quid pro quo for extended financial aid, the
report adds.
Based in Seoul, Korea, Ssangyong Engineering & Construction Co.,
Ltd. -- http://www.ssyenc.com/eng/-- is involved in the areas of
construction and engineering.
Ssangyong E&C filed for debt-rescheduling program on Feb. 26,
2013, after it has suffered from capital erosion due to massive
losses for the second straight year in 2012 amid the lackluster
housing market, Yonhap News reported.
================
S R I L A N K A
================
NAT'L SAVINGS BANK: Fitch Rates USD-Denominated Notes at BB-
------------------------------------------------------------
Fitch Ratings has assigned Sri Lanka-based National Savings Bank's
(NSB) USD-denominated notes due 2018 a final rating of 'BB-'. This
follows the receipt of the final documents conforming to
information previously received.
The final rating is at the same level as the expected rating
assigned on 23 August 2013. The notes have a maturity of five
years and coupon payments will be at 8.875% on a semi-annual
basis.
Key Rating Drivers:
The notes are rated at the same level as NSB's Long-Term Foreign-
Currency Issuer Default Rating (IDR) of 'BB-' as they constitute
unsecured and unsubordinated obligations of the bank.
Rating Sensitivities
Any change in Sri Lanka's rating or to the perception of state
support to NSB could result in a change in NSB's IDRs and hence
the rating of the notes.
===============
T H A I L A N D
===============
THAI BEVERAGE: S&P Lowers CCR to 'BB+'; Outlook Stable
------------------------------------------------------
Standard & Poor's Ratings Services said that it had lowered its
long-term corporate credit rating on Thailand-based beverage
manufacturer Thai Beverage Public Co. Ltd. to 'BB+' from 'BBB-'.
The outlook is stable. At the same time, S&P affirmed its
'axBBB+' long-term and 'axA-2' short-term ASEAN regional scale
ratings on the company. S&P removed all the ratings from
CreditWatch, where it placed them with negative implications on
Nov. 27, 2013. S&P then withdrew all the ratings at the company's
request.
"We lowered the rating on ThaiBev because we now view the company
as a "core" member of a corporate group that we assess as having
weaker credit characteristics than those of ThaiBev as a stand-
alone entity, following the implementation of our revised group
ratings methodology criteria," said Standard & Poor's credit
analyst Xavier Jean. S&P defines ThaiBev's corporate group as
consisting of ThaiBev, Singapore-based conglomerate Fraser & Neave
Ltd. (F&N), and investment holding company TCC Assets Ltd. (TCCA).
Based on S&P's criteria, it views ThaiBev as a "core" but
"partially insulated" member of the group, and cap the company's
stand-alone credit profile of 'bbb-' at one-notch above S&P's
assessment of the group credit profile of 'bb'.
"We view the corporate group to which ThaiBev belongs as being
highly leveraged. We evaluate the group's consolidated cash flow
adequacy as substantially weaker and its consolidated debt as
considerably higher than that of either ThaiBev or F&N on a stand-
alone basis. We estimate the consolidated ratio of total debt to
EBITDA to be 6.0x-6.5x and the consolidated EBITDA interest
coverage to be about 4.0x-4.5x, following a planned capital
reduction at F&N. We also estimate that about 50% of the
consolidated debt is held at TCCA, an investment holding with no
cash-generative operations besides the common dividends it will
receive from F&N. The debt is the result of what we believe was a
largely debt-funded purchase of about a 61% stake in F&N between
2012 and 2013," S&P added.
S&P's assessment of ThaiBev as a core member of the corporate
group reflects its view that the group is highly unlikely to sell
the company, given its high contribution to the group's revenues,
EBITDA, and cash flows. ThaiBev operates in the beverage segment,
which S&P believes is integral to the overall group's strategy.
The company also has a long record of successful operations in its
core markets and its majority ownership has remained unchanged for
more than a decade.
"We assess ThaiBev to be a "partially insulated" member of its
corporate group. We no longer view ThaiBev's financial
performance and funding prospects as being entirely dissociated
from those of the other group members, in particular TCCA," said
Mr. Jean. "The large debt-funded acquisition of F&N by the common
majority shareholder of TCCA and ThaiBev suggests a significant
shift in financial policy and a heightened risk tolerance that
affected the entire group structure, with both entities
simultaneously leveraging their balance sheet significantly. We
believe that TCCA's likely high debt burden and the subordinated
nature of its debt has the potential to lead to more aggressive
financial policies at ThaiBev and influence ThaiBev's financial
performance, debt-servicing capacity, and financial policies to an
extent." That said, S&P acknowledges that the company can operate
as a separate entity, keep its funds separate from other group
companies, is severable from the group, and pay its liabilities
out of its own funds.
ThaiBev's stand-alone credit profile is based on a "satisfactory"
business risk profile and an "intermediate" financial risk
profile, as defined in S&P's criteria. S&P's business risk
profile assessment incorporates its "low" industry risk assessment
for the branded non-durable consumer products sector and a
"moderate" country risk based on the company's focus on operations
in Thailand. S&P expects ThaiBev to maintain its domestic market
share in the stable and highly profitable spirits market because
of strong brand recognition and well-established distribution
networks. The company's proven ability to pass-through increases
in excise taxes to its customers also supports its business risk
profile because it makes margins more predictable.
S&P's assessment of ThaiBev's financial risk profile is based on
its expectation that the company will generate positive
discretionary cash flows over the next three years and slowly
reduce its debt burden. This is despite likely softness in
operating performance over the next six to 12 months, given higher
excise taxes on spirits and beer and a weaker-than-anticipated
performance at the company's non-alcoholic beverage operations.
The stable outlook reflects S&P's view that the group credit
profile will continue to constrain ThaiBev's stand-alone credit
profile, unless debt at the group level declines materially.
S&P could raise the rating on ThaiBev if it thinks that the group
credit profile has improved. This could happen if the group
reduces its debt, such that its ratio of consolidated debt to
EBITDA falls below 4.5x on a sustained basis.
S&P could lower the rating if it believes that the group credit
profile has deteriorated. This could materialize if the
performance of ThaiBev or F&N, which are the major contributors to
the group's cash flows, weakens materially. A consolidated ratio
of debt to EBITDA of more than 6.5x on a sustained basis would
indicate such deterioration. S&P could also lower the rating if
it observed that ThaiBev and other group members are operating
more like a single economic entity.
*********
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 ***