/raid1/www/Hosts/bankrupt/TCRAP_Public/140127.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, January 27, 2014, Vol. 17, No. 18
Headlines
A U S T R A L I A
GUNNS LIMITED: Former Port Loading Site Up for Sale
H & S VISION: Paradise Palms Placed on the Market
NATIONAL WEB: Hall Chadwick Appointed as Administrators
PROJECTS FOR CHILDREN: FTI Consulting Appointed as Administrators
QANTAS AIRWAY: S&P Affirms 'BB+' Rating on Sr. Unsecured Debt
SECTOR 7 G DEVELOPMENTS: BDO Appointed as Administrators
C H I N A
CHINA TELETECH: Pays $50,000 Settlement to Enable Funds
FUFENG GROUP: S&P Revises Outlook to Stable & Affirms 'BB' CCR
I N D I A
ACE KUDALE: CRISIL Reaffirms 'B' Rating on INR270MM Loans
ADITYA STEEL: CRISIL Assigns 'B' Ratings to INR180MM Loans
ALLIANCE MALL: CRISIL Reaffirms 'B+' Rating on INR1.8BB Loans
AXIS BANK: Fitch Says Stake Sale Not to Erode Gov't Bank Support
BHARAT METAL: ICRA Reaffirms 'B' Rating on INR2.5cr Loans
CIPSA TEC: CRISIL Assigns 'D' Ratings to INR450MM Loans
DHANVRIDHI COMMERCIAL: CRISIL Keeps 'B' Rating on INR122.4M Loan
DURG EDUCATION: CRISIL Reaffirms 'D' Rating on INR63.1MM Loan
G.D OVERSEAS: ICRA Reaffirms 'B+' Rating on INR18cr Loans
G I INDUSTRIES: CRISIL Reaffirms 'B+' Rating on INR50MM Loan
GLOBAL TANNING: CRISIL Reaffirms 'B+' Rating on INR53MM Loans
HILL CREST: CRISIL Rates INR300MM Long Term Loan at 'B+'
KAMAKSHI LAMIPACK: CRISIL Cuts Rating on INR152MM Loans to 'D'
KIA TEXTILES: CRISIL Assigns 'B+' Rating to INR80MM Loans
KINGFISHER AIRLINES: CRISIL Reaffirms D Rating on INR55.82BB Loan
KK PROTEINS: ICRA Reaffirms 'B+' Rating on INR15cr Loans
KRR INFRA: ICRA Suspends 'D' Rating on INR84cr Loans
N. K. SHARMA: CRISIL Cuts Rating on INR100MM Loan to 'D'
NADIA CONSTRUCTIONS: CRISIL Cuts Rating on INR100MM Loan to 'D'
NAND ESTATE: ICRA Revises Rating on INR24cr Term Loan to 'B'
NEW ASIAN: ICRA Revises Rating on INR25cr Loans to 'B+'
NEW ASIAN INFRA: ICRA Reaffirms 'B' Rating on INR29.5cr Loan
OM ENERGY: CRISIL Assigns B+ Rating to INR400MM Long Term Loan
PGM INFRA: ICRA Suspends 'D' Rating on INR57.5cr Loans
PRINCE MARKETING: ICRA Reaffirms 'B+' Rating on INR33cr Loans
R.D.GOEL: CRISIL Reaffirms 'B+' Ratings on INR139.4MM Loans
RADIANT LUBES: CRISIL Reaffirms 'B' Rating on INR137.5MM Loans
RR FAB: CARE Cuts Rating on INR4.31cr Long Term Loan From 'BB-'
SARIA INDUSTRIES: CRISIL Reaffirms B+ Rating on INR150MM Loans
SHIV SHAKTI: ICRA Assigns 'B' Ratings to INR6.4cr Long Term Loans
SHIVALIK EXPORTS: CRISIL Reaffirms 'B' Rating on INR5MM Loan
SHREE TRIBHUVAN: CRISIL Assigns 'B+' Rating to INR87.5MM Loans
SHREE SAIKRISHNA: CRISIL Assigns 'B+' Ratings to INR80MM Loans
SHRI RIDDHI: CRISIL Rates INR77.5MM Term Loan at 'B+'
SREE BHARGAVI: CRISIL Assigns 'B+' Ratings to INR200MM Loans
SREE DRG: CRISIL Reaffirms 'B+' Rating on INR95.2MM Loans
SRI JAYAJOTHI: CARE Reaffirms B+ Rating on INR55.39cr LT Loan
SRI RAVI: ICRA Assigns 'B' Ratings to INR7cr Loans
SUVARNA FIBROTECH: CRISIL Reaffirms D Ratings on INR150MM Loans
SWAMBHUNATH COLD: CRISIL Reaffirms 'D' Ratings on INR97MM Loans
TGI PACKAGING: CRISIL Assigns 'B' Ratings to INR128.5MM Loans
TIRUPATI OIL: ICRA Suspends 'B-' rating on INR11cr Long Term Loan
TRICOM INDIA: CARE Reaffirms 'D' Rating on INR46.9cr Loans
YASHVEER CERAMICS: ICRA Reaffirms 'B+' Rating on INR3cr Loans
J A P A N
PANASONIC CORP: Fitch Upgrades Sr. Unsecured Ratings to 'BB+'
N E W Z E A L A N D
ALLIED FARMERS: Settles NZ$2-Million Debt Owed to Speirs
S O U T H K O R E A
HANJIN SHIPPING: To Close Two Loss-Making Shipping Lines
T H A I L A N D
THAILAND: Turmoil to Weigh on Bank Resilience, Fitch Says
V I E T N A M
VIETNAM BANK FOR AGRICULTURE: Fitch Affirms LT IDRs at 'B'
VIETNAM: Fitch Affirms 'B+' Ratings; Revises Outlook to Positive
- - - - -
=================
A U S T R A L I A
=================
GUNNS LIMITED: Former Port Loading Site Up for Sale
---------------------------------------------------
Cliff Sanderson at dissolve.com.au reports that expressions of
interest are sought for the purchase of a port site formerly owned
by Gunns Limited.
The sale includes titled land that has an area of 20.90 hectares.
It also includes different storage structure and a timber house
that is partially finished, the report says.
Expressions of interest are sought until Feb. 7, 2014,
dissolve.com.au discloses. The site for sale is located on
Kangaroo Island, South Australia.
Based in Launceston, Australia, Gunns Limited (ASX:GNS) --
http://www.gunns.com.au/-- was an hardwood and softwood forest
products company. It operated within three segments: Forest
products, Timber products and Other activities. Gunns has about
645 employees in Tasmania, Victoria, South Australia and Western
Australia.
On Sept. 25, 2012, the directors of Gunns Limited and its 35
entities, and the responsible entity of Gunns Plantations Limited
appointed Ian Carson, Daniel Bryant and Craig Crosbie of PPB
Advisory as Voluntary Administrators. KordaMentha has also been
appointed Receivers and Managers.
The appointment came after Gunns failed to secure an equity
investor amid high debt and a prolonged trading halt, The
Australian reported.
Gunns was placed into liquidation in March 2013.
H & S VISION: Paradise Palms Placed on the Market
-------------------------------------------------
Nick Dalton at The Cairns Post reports that the jewel in the H&S
Vision crown, Paradise Palms and the large development sites
surrounding the 18-hole golf course, is being prepared for sale.
According to the report, marketing agent Colliers International
Cairns managing director Stacey Quaid said Paradise Palms was the
most significant development site to go to market this year in the
Far North and there had been much interest.
"There has been initial inquiry from various parties, locally,
throughout Australia, mainly Brisbane and Sydney, and
internationally, mostly from Asia," the report quotes Mr. Quaid as
saying.
The Cairns Post relates that Mr. Quaid said the property would be
the "major sale" of the year and was offered in its entirety or in
part.
It is estimated that the full development of 1,400 residential and
resort-style accommodation lots, a 20-lot residential housing
stage, a 153-apartment lakeside site and acreage could fetch up to
AUD1 billion, the report notes.
The report says the sale includes a 6592m championship 18-hole
golf course, restaurant and bars, a country club, The Greens Hotel
Resort with eight remaining two-bedroom dual-key apartments and
management rights, five lots already developed, 1400 approved
residential and resort-style lots and another 20 residential
blocks, a 153-apartment site and an acreage subdivision.
Expressions of interest open next month and close at the end of
April, the report adds.
The Cairns Post reports that McGrathNicol is also about to place
H&S Vision's apartment management rights at The Lakes, Cairns One,
The Greens and The Keys on the market. All businesses continue to
operate as usual.
H&S Vision Group is a property developer. Creditors, who are owed
at least $52.5 million, in October 2013 voted to place 10 entities
under the group into liquidation after they went into voluntary
administration and receivership in August 2013, according to The
Cairn Post. The ANZ Bank is owed AUD51.6 million, while unsecured
creditors are owed AUD951,174.
NATIONAL WEB: Hall Chadwick Appointed as Administrators
-------------------------------------------------------
Richard Albarran -- ralbarran@hallchadwick.com.au -- and
Shahin Hussain -- shussain@hallchadwick.com.au -- of Hall Chadwick
were appointed administrators of National Web Directory Pty Ltd on
Jan. 22, 2014.
A first meeting of the creditors of the Company will be held on
Feb. 4, 2014, at 10:00 a.m. at the offices of Hall Chadwick,
Level 19, 144 Edward St, in Brisbane, Queensland.
PROJECTS FOR CHILDREN: FTI Consulting Appointed as Administrators
-----------------------------------------------------------------
Joanne Dunn -- joanne.dunn@fticonsulting.com -- & Ginette Muller -
- ginette.muller@fticonsulting.com -- at FTI Consulting were
appointed administrators of Projects for Children Pty Ltd on Jan.
22, 2014.
A first meeting of the creditors of the Company will be held on
Feb. 4, 2014, at 10:30 a.m. at the offices of FTI Consulting, 22
Market Street, in Brisbane, Queensland.
QANTAS AIRWAY: S&P Affirms 'BB+' Rating on Sr. Unsecured Debt
-------------------------------------------------------------
Standard & Poor's Ratings Services said that it had affirmed its
'BB+' long-term issue rating on Qantas Airways Ltd.'s senior
unsecured debt, in line with the corporate credit rating. At the
same time, S&P assigned a recovery rating of '3', indicating its
expectation of meaningful (50%-70%) recovery for creditors in the
event of a payment default. S&P has also removed the senior
unsecured debt from CreditWatch with negative implications, where
it was placed on Dec. 5, 2013.
Supporting the issue and recovery ratings is S&P's valuation of
Qantas Airways as a going concern in a hypothetical default
scenario. The ratings reflect S&P's view of the airline's leading
domestic market position, the enduring value of the Qantas brand,
and our assessment that the business would retain more value as a
reorganized operating entity than in liquidation.
Standard & Poor's simulated default scenario assumes a payment
default in 2019 due to intensifying competition, rendering Qantas
vulnerable to adverse industry conditions such as persistently
weak economic conditions, escalated fuel prices, or external
shocks such as a major terrorist incident or pandemic. In this
scenario, operational underperformance would likely result in
weakened cash flows and liquidity as the airline approaches
hypothetical default.
S&P values Qantas using a discrete asset valuation since the
aircraft and other tangible assets represent the majority of its
assets. S&P's valuation assumptions include conservative
realization rates of receivables and inventory, and plant and
equipment. S&P's stressed valuation assumes that secured loans
and financial leases are sufficiently collateralized and assumes
they would be fully satisfied with no residual claim on
unencumbered assets.
Qantas' fleet is predominantly encumbered and the age of the
encumbered fleet is materially younger than that of the
unencumbered fleet, therefore limiting the realizable value of the
unencumbered fleet available to senior unsecured lenders.
Moreover, S&P expects any new aircraft to more likely be financed
on a secured basis which, over time, would further reduce the
recovery value of the unencumbered fleet. Nevertheless,
underpinning the recovery prospects for the airline's senior
unsecured lenders is S&P's assessment of the stressed valuation of
Qantas' freehold land holdings, leasehold improvements, aircraft
deposits, landing slots, joint venture arrangements, and loyalty
business.
.
SECTOR 7 G DEVELOPMENTS: BDO Appointed as Administrators
--------------------------------------------------------
Matthew Joiner -- matthew.joiner@bdo.com.au -- and Gerald Collins
-- gerry.collins@bdo.com.au -- of BDO Business Recovery and
Insolvency were appointed administrators of Sector 7 G
Developments Pty Ltd on Jan. 21, 2014.
A first meeting of the creditors of the Company will be held at on
Feb. 3, 2014, at 11:00 a.m. at the offices of BDO Business
Recovery and Insolvency (QLDP Pty Ltd, Level 6, 10 Eagle Street in
Brisbane, Queensland.
=========
C H I N A
=========
CHINA TELETECH: Pays $50,000 Settlement to Enable Funds
-------------------------------------------------------
China Teletech Holding on Nov. 28, 2011, entered into a settlement
and amendment agreement with Enable Growth Partners, LP, Enable
Opportunity Partners, LP, and Pierce Diversified Strategy Master
Fund LLC, to settle the Debenture, Warrants and Judgment arising
from that certain securities purchase agreement dated July 31,
2007, and amended on Nov. 3, 2008, by and among the Company and
the Enable Funds.
The Company said in a filing with the U.S. Securities and Exchange
Commission that it has not paid any settlement payment as required
by the Settlement Agreement. On Jan. 7, 2014, in lieu of the cash
satisfaction of the settlement payment, the Company entered into a
letter agreement with Enable Funds pursuant to which the Company
agreed to pay the sum of $50,000 within three business days upon
execution of the Letter Agreement and issue to Enable Funds an
aggregate of 4,600,000 shares of common stock of the Company,
which shares will be evidenced by a certificate bearing a
customary securities act legend.
As of Jan. 15, 2014, the sum of $50,000 was paid to the Enable
Funds. The Company intends to issue the 4,600,000 shares of the
Company's common stock to the Enable Funds as soon as practical.
The Purchase Agreement, Debentures and Warrants will be deemed
null and void and of no further force or effect upon satisfaction
of the obligations of the Company under the Letter Agreement.
About China Teletech
Tallahassee, Fla.-based China Teletech Holding, Inc., is a
national distributor of prepaid calling cards and integrated
mobile phone handsets and a provider of mobile handset value-added
services. The Company is an independent qualified corporation
that serves as one of the principal distributors of China Telecom,
China Unicom, and China Mobile products in Guangzhou City.
On June 30, 2012, the Company strategically sold its wholly-owned
subsidiary, Guangzhou Global Telecommunication Company Limited
("GGT"), to a third party. GGT was engaged in the trading and
distribution of cellular phones and accessories, prepaid calling
cards, and rechargeable store-value cards.
China Teletech disclosed net income of US$53,542 on US$26.62
million of sales for the year ended Dec. 31, 2012, as compared
with a net loss of US$348,124 on US$18.84 million of sales for the
year ended Dec. 31, 2011. The Company's balance sheet at
Sept. 30, 2013, showed $1.71 million in total assets, $2.13
million in total liabilities, and a $418,679 total stockholders'
deficit.
WWC, P.C., in San Mateo, California, issued a "going concern"
qualification on the consolidated financial statements for the
quarter ended June 30, 2013. The independent auditors noted that
the Company has incurred substantial losses, and has difficulty to
pay the People's Republic of China government Value Added Tax and
past due Debenture Holders Settlement, all of which raise
substantial doubt about its ability to continue as a going
concern.
FUFENG GROUP: S&P Revises Outlook to Stable & Affirms 'BB' CCR
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it had revised its
rating outlook on Fufeng Group Ltd. to stable from negative. At
the same time, S&P affirmed its 'BB' long-term corporate credit
rating on Fufeng and its 'BB' long-term issue rating on the
company's outstanding senior unsecured notes. In line with the
outlook revision, S&P raised its long-term Greater China regional
scale ratings on Fufeng and the notes to 'cnBBB-' from 'cnBB+'.
Fufeng is a China-based manufacturer of corn-based biochemical
products including monosodium glutamate (MSG) and xanthan gum
(XG).
"We revised the outlook to reflect our expectation that Fufeng's
financial performance is likely to stabilize over the next 12
months," said Standard & Poor's credit analyst Lillian Chiou.
"This is because prices of MSG are stabilizing after a recent
declining trend, and consolidation in the market is almost
complete."
A further material decline in the average selling price of MSG is
unlikely in the next 12 months, in S&P's opinion. Nevertheless
recovery in prices could take a long time. S&P expects that
Fufeng's EBITDA margin will stay at 10%-11% for 2014 and 2015.
S&P also anticipates that the company's free operating cash flow
will be positive because of significantly lower capital
expenditure.
Fufeng's leading market position in the MSG segment underpins its
"fair" business risk profile, in S&P's view. The company has
executed its market consolidation strategy well and has a market
share of about 50%.
Fufeng's strong position in the XG business also supports the
company's operational and financial performance. The profit
margin for XG is materially higher than for MSG although XG has a
much smaller contribution to revenue than MSG. S&P expects the
average selling price of XG to drop by 10%-15% in 2014 from its
historical high level in 2013. Nonetheless, S&P believes Fufeng
has sufficient financial buffer to absorb the decline of XG prices
over the next 12 months.
"We expect volatile raw material prices to continue to weigh on
Fufeng's EBITDA margin," said Ms. Chiou. "However, the company's
low costs and vertically integrated production temper the risk.
Fufeng's execution risk is low because the company has completed
the majority of its capacity expansion."
S&P's assessment of Fufeng's business risk profile also
incorporates its view that the branded non-durable industry faces
"low" industry risk and China has "moderate" country risk.
S&P's assessment that Fufeng's financial risk profile is
"significant" reflects its view of the company's moderate revenue
growth, stabilizing debt profile, and high seasonality in working
capital needs.
The stable outlook on Fufeng reflects S&P's expectation that the
company will maintain its market positions in the MSG and XG
segments and its current profitability. S&P expects Fufeng to
reduce its capital expenditure and maintain financial discipline,
such that its key credit ratios stay in line with the rating.
Higher visibility of a rise in MSG prices and of movement in XG
prices is important for S&P to upgrade Fufeng. S&P could raise
the rating if it expects Fufeng's operating performance to recover
quickly, such that the ratio of debt to EBITDA is less than 3.0x
and EBITDA interest coverage is more than 6.0x on a sustainable
basis.
S&P may lower the rating if Fufeng's profitability deteriorates
such that its EBITDA margin drops below 10% on a sustained basis.
This could happen if the average selling price of MSG recovers
slower than S&P expects and that of XG falls more than S&P
anticipates. S&P could also downgrade Fufeng if the company's
leverage increases significantly because of more aggressive debt-
funded expansion. A ratio of debt to EBITDA staying above 4.0x
and EBITDA interest coverage below 3.0x on a sustained basis could
trigger a downgrade.
=========
I N D I A
=========
ACE KUDALE: CRISIL Reaffirms 'B' Rating on INR270MM Loans
---------------------------------------------------------
CRISIL's ratings on the bank facilities of Ace Kudale Car Pvt Ltd
continue to reflect AKCPL's weak financial risk profile, marked by
accumulated losses and weak debt protection measures, and its
large working capital requirements. The ratings also factor in the
company's low bargaining power with its principal, Maruti Suzuki
India Ltd (MSIL; rated CRISIL AAA/Stable/CRISIL A1+), and its
susceptibility to intense competition in the automobile dealership
business. These rating weaknesses are partially offset by the
funding support AKCPL gets from its promoters.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 10 CRISIL A4 (Reaffirmed)
Cash Credit 35 CRISIL B/Stable (Reaffirmed)
Inventory Funding
Facility 187 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 12.7 CRISIL B/Stable (Reaffirmed)
Term Loan 35.3 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that AKCPL will continue to benefit over the
medium term from its established relationship with its principal.
The outlook may be revised to 'Positive' if AKCPL reports a
significant increase in its revenues and profitability, resulting
in sustained improvement in its capital structure over the medium
term. Conversely, the outlook may be revised to 'Negative' in case
of further deterioration in the company's financial risk profile,
most likely because of larger-than-expected working capital
requirements, or withdrawal of unsecured loans by promoters, or
less-than-expected cash accruals.
Update
For 2012-13 (refers to financial year, April 1 to March 31), AKCPL
reported revenues of INR1.2 billion, a sharp increase over INR0.8
billion in the previous year. The increase was driven by the
recovered performance of its principal, better per-vehicle
realisation, and increase in its spares, accessories, and service
business. For 2012-13, the company had an operating margin of 0.5
per cent, constrained by high employee costs, large rental outgo,
and marketing expenses. Consequently, it continues to book cash
losses. In 2013-14, AKCPL reported sales of INR1 billion till
November 30, 2013, and is expected to achieve a topline of about
INR1.4 billion with an improvement in its operating margin to
about 2 per cent, for the year.
Over the years, with the increasing scale of operations, AKCPL has
optimised its working capital management with inventory levels
moderating to 45 days as on March 31, 2013, from over 66 days a
couple of years earlier. Its bank limits, though, continue to be
highly utilised as its net worth has been eroded by losses. AKCPL
has, however, been supported by unsecured loans extended by
promoters; the balance of such loans stood at INR121 million as on
September 30, 2013, increasing from INR94.3 million as on March
31, 2013. This will also support AKCPL in servicing its large term
debt obligations of INR10 million in 2013-14.
AKCPL's financial risk profile remains weak, marked by accumulated
losses of INR51 million as on March 31, 2013, which meant high
reliance on external funding. The company had outstanding bank
funding of about INR130 million as on March 31, 2013. The high
debt level and low profitability resulted in a weak interest
coverage ratio of 0.22 times for 2012-13.
Incorporated in 2007 and promoted by the Kudale family, AKCPL
started its operations in 2010 with the dealership of MSIL. It has
one owned showroom-cum-workshop at Manjri, Pune-Solapur highway,
and another workshop on rented premises at Bhosari, Pune-Nashik
highway (both in Maharashtra).
ADITYA STEEL: CRISIL Assigns 'B' Ratings to INR180MM Loans
----------------------------------------------------------
CRISIL has revoked the suspension of its ratings on the bank
facilities of Aditya Steel Rolling Mills Pvt Ltd and has assigned
its 'CRISIL B/Stable/CRISIL A4' ratings to these facilities. The
ratings had been suspended by CRISIL as per its rating rationale
dated Nov. 14, 2013, as ASRM had not provided necessary
information to review the ratings. ASRM has now shared the
requisite information, thereby enabling CRISIL to assign ratings
to the bank facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 40 CRISIL A4 (Assigned;
Suspension Revoked)
Cash Credit 170 CRISIL B/Stable (Assigned;
Suspension Revoked)
Term Loan 10 CRISIL B/Stable (Assigned;
Suspension Revoked)
The ratings reflect ASRM's below-average financial risk profile
marked by its small net worth, high total outside liabilities to
tangible net worth ratio and below-average debt protection
metrics. The ratings also factor in the company's large working
capital requirements, and its exposure to intense competition in
the steel trading segment. These rating weaknesses are partially
offset by the extensive experience of ASRM's promoters in the
steel trading business, and its established relations with
customers.
Outlook: Stable
CRISIL believes that ASRM will continue to benefit over the medium
term from its promoters' extensive industry experience and its
established relations with customers. The outlook may be revised
to 'Positive' if the company registers a substantial and sustained
improvement in its revenues and profitability margins, or there is
a sizeable increase in its net worth on the back of capital
additions by the promoters. Conversely, the outlook may be revised
to 'Negative' if there is a substantial decline in ASRM's
profitability margins, or deterioration in its capital structure
because of larger-than-expected working capital requirements.
Incorporated in 1994, ASRM manufactures and trades in thermo-
mechanically treated bars and other steel intermediaries (blooms,
billets, and ingots). The company is promoted by Mr. S K Khemka
and Mr. P K Khemka, who have about three decades' experience in
the steel business.
ALLIANCE MALL: CRISIL Reaffirms 'B+' Rating on INR1.8BB Loans
-------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable' rating to the long-
term bank facilities of Alliance Mall Developers Co. Pvt. Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 450.00 CRISIL B+/Stable (Reaffirmed)
Term Loan 200.00 CRISIL B+/Stable (Reaffirmed)
Term Loan 450.00 CRISIL B+/Stable (Reaffirmed)
Term Loan 700.00 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflecta Alliance's exposure to
implementation and offtake risks associated with its ongoing
project, coupled with susceptibility to cyclicality in the Indian
real estate industry. These rating weaknesses are partially offset
by the established presence of the Provogue group coupled with the
management expertise and financial support of Capital Shopping
Centre Group PLC.
Outlook: Stable
CRISIL believes that Alliance will benefit over the medium term
from its promoters' established presence and ongoing support from
Capital Shopping Centre Group PLC. The outlook may be revised to
'Positive' if the response to the project is significantly better-
than-expected leading to substantially higher-than-envisaged cash
flow generation from the project. Conversely, the outlook may be
revised to 'Negative' if there are significant delays in the
execution of projects or cash flow from operations are
substantially below expectations, either due to subdued response
to the project or lower advances, impacting its financial risk
profile.
Alliance is a special purpose vehicle (SPV) floated by Prozone
Capital Shopping Centres Limited to undertake a real estate mixed-
use development (MUD) project at Coimbatore, Tamil Nadu. The
company plans to begin construction of the mall from October 2012
with the completion expected in March 2015. PCSCL holds a 61.5 per
cent equity stake in Alliance, 3.5 per cent is held by LTG
International, while the remaining 35 per cent is held by Triangle
Real Estate India Fund.
Prozone Capital Shopping Centres Limited is a listed company, in
which the Chaturvedi family (promoters of Provogue India Ltd.) and
Capital Shopping Centre Group PLC hold a stake. The company is
engaged in developing residential, commercial and retail-centric
mixed-use destination centers in tier II and tier III cities in
India.
AXIS BANK: Fitch Says Stake Sale Not to Erode Gov't Bank Support
----------------------------------------------------------------
The government's plan to sell part of its stake in Axis Bank does
not reflect a strategic shift in support for its majority-owned
banks, says Fitch Ratings. This is because the initiative
reflects a step-up in the efforts to try and meet its
disinvestment targets -- even as the probability of support for
majority-state-owned banks remains anchored by governing acts
which cannot be easily changed.
The planned sale, if it materializes, seems intended to contribute
to the government's near-term fiscal objectives. The current
state shareholding in Axis bank is 20.7%, held through the
Specified Undertaking of Unit Trust of India (SUUTI). The
anticipated sale of around one-half of its stake is expected to
generate approximately INR60bn, and help in meeting the central
government's disinvestment target of INR540bn for the financial
year.
However, this event would not weaken our expectation of support
for the state-owned banks. This is because the prospect of
support and the maintenance of the government's majority stake in
these banks is by virtue of the respective acts which govern these
banks. Any plan to reduce ownership below 51% for nationalized
banks, and 55% for State Bank of India, would require amendment of
these acts by parliament -- which is unlikely any time soon, given
the political considerations of such an action. Moreover, the
government has shown its continued willingness to extend support
via regular capital injections.
The Issuer Default Rating (IDR) of Axis does not benefit from
government support to start with; and the "viability rating" of
'bbb-' (which is also the IDR), and the Support Rating Floor of
BB+, would both remain unaffected by the success of the sale. A
reduction in state ownership, exercised through SUUTI -- an
investment arm of government, set up to rescue UTI in 2003 --
could change the board composition of Axis Bank but not its day-
to-day operations. This is because any reduction in the three
(out of the 14) board seats held by government is unlikely to
alter the way the bank is managed.
The recent relaxation of the foreign investment limit in Axis Bank
to 62% (up from 49%) in December 2013 should also raise foreign
interest in the planned share sale of Axis, which has performed
above the average for Indian private-sector banks.
BHARAT METAL: ICRA Reaffirms 'B' Rating on INR2.5cr Loans
---------------------------------------------------------
ICRA has reaffirmed the long term rating at '[ICRA]B' to the
INR2.50 crore fund based facilities and short term rating at
'[ICRA]A4' to the INR5.00 crore non fund based facilities of
Bharat Metal Fabricators.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based facilities 2.50 [ICRA]B
Non-Fund based
Facilities 5.00 [ICRA]A4
The reaffirmation of ratings takes into account low revenue
visibility for FY14 with the outstanding order book of INR2.85
crore and its weak financial risk profile marked by low
profitability and accruals and consequently leveraged capital
structure and weak coverage indicators. Further the firm has high
client concentration risk (with Gujarat and Rajasthan state
corporations accounting for 99% of its revenues during FY12 and
FY13) which in turn has impacted the revenues in current financial
year as BMF was unable to secure any orders from Gujrat Transport
Corporation. In addition to these, the rating also factors in the
susceptibility of BMF's business to the slowdown in the user
industry (Public Transport) as well as its ability to successfully
bid for tenders, as witnessed from the volatile revenues in the
past. Further, absence of any raw material price escalation clause
exerts pressure on the profitability of the firm.
The rating, however, favorably factors in the long standing
experience of BMF's promoters in the bus bodybuilding business,
established relationships with major customers as reflected by
repeated orders. Further, with the plant being located in Jaipur
which is a manufacturing hub for bus body building due to which
the firm benefits from low labour costs.
Going forward, firm's ability to secure adequate orders and timely
execution of the pending order book will be the key rating
sensitivities.
Bharat Metal Fabricators was incorporated in the year 1993 with
the head office in Jaipur. The firm is primarily engaged into
fabrication of bus bodies with an installed capacity of around 600
Nos. PA. The firm's clients include various transport corporations
like R.S.R.T.C (Rajasthan State Road Transport Corporation),
G.S.R.T.C (Gujarat State Road Transport Corporation), D.T.C (Delhi
Transport Corporation), APSRTC (Andhra Pradesh State Road
Transport Corporation) etc. The firm is professionally managed by
Mr. N K Agarwal. The firm complies with the requirement of ISO
9001:2008 certifications.
Recent Results
During the financial year 2012-13, the firm reported a profit
after tax (PAT) of INR0.26 crore on an operating income of
INR19.49 crore as against PAT of INR0.15 crore on an operating
income of INR11.57 crore in 2011-12.
CIPSA TEC: CRISIL Assigns 'D' Ratings to INR450MM Loans
-------------------------------------------------------
CRISIL has assigned its 'CRISIL D/CRISIL D' ratings to the bank
facilities of CIPSA TEC India Pvt Ltd. The ratings reflect
instances of delay by CIPSA TEC in servicing its term loan
obligations on account of weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 110 CRISIL D
Proposed Long Term
Bank Loan Facility 70 CRISIL D
Cash Credit 140 CRISIL D
Letter of Credit 130 CRISIL D
CIPSA TEC has modest scale of operations in the intensely
competitive printed circuit board (PCB) manufacturing industry and
below-average financial risk profile marked by high gearing and
weak debt protection metrics. However, the company benefits from
the extensive industry experience of its promoters in the PCB
manufacturing industry.
Established in 2006 as a joint venture between Circuitos Impresos
Profesionales, S.A (CIPSA, Spain), Tecnomec, Italy and Indian
promoters Mr. Alok Garg and Mr. Anil Gupta, CIPSA TEC manufactures
printed circuit boards.
For 2012-13 (refers to financial year, April 1 to March 31), CIPSA
TEC reported profit after tax (PAT) of INR9.7 million on net sales
of INR569 million, as against a net loss of INR45 million on net
sales of INR572 million for 2011-12.
DHANVRIDHI COMMERCIAL: CRISIL Keeps 'B' Rating on INR122.4M Loan
----------------------------------------------------------------
CRISIL's rating on the bank facilities of Dhanvridhi Commercial
Pvt Ltd continues to reflect its small scale of operations and
moderate financial risk profile marked by a small net worth base
and weak liquidity. These rating weaknesses are partially offset
by the benefits that DCPL derives from its promoter's extensive
experience in the railway component business.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 22.6 CRISIL A4 (Reaffirmed)
Cash Credit 32.4 CRISIL B/Stable (Reaffirmed)
Proposed Cash Credit
Limit 2.2 CRISIL B/Stable (Reaffirmed)
Term Loan 87.8 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that DCPL will benefit over the medium term from
its promoter's extensive business experience. The outlook may be
revised to 'Positive' if the company reports a significant and
sustainable increase in its scale of operations and cash accruals,
and better working capital management, leading to improvement in
its liquidity. Conversely, the outlook may be revised to
'Negative' if DCPL's working capital cycle lengthens, or if it
undertakes a significant debt-funded capital expenditure
programme, leading to deterioration in its financial risk profile.
Update
DCPL registered revenues of INR50.8 million in 2012-13 (refers to
financial year, April 1 to March 31) through its order for
manufacturing 250 high-capacity wagons on a jobwork basis for
Besco Ltd'foundry division (Besco). The company has reported
operating margin of 67.36 per cent. The company is further
expecting an order of 500 high-capacity wagons in 2013-14.
DCPL had no inventory or receivables on its books as on March 31,
2013. The receivable days are largely dependent on timely payment
to Besco by the Indian Railways. On account of moderate working
capital requirements in its initial year of operations, the
company had low bank limit utilisation of 42 per cent for the nine
months ended November 2013.
DCPL has a moderate capital structure, reflected in a gearing of
around 1 time as on March 31, 2013 and low dependence on bank
facilities for working capital requirement partially constrained
by its small net worth base of INR69.5 million. The company's debt
protection metrics have been above average, with interest coverage
and net cash accruals to total debt ratios at 2.37 times and 25
per cent, respectively, in 2012-13. In 2012-13, it generated cash
accruals of INR18.9 million against which it had term debt
repayment obligation of INR13.7 million. DCPL's accruals and debt
obligations are expected to be tightly matched.
DCPL was set up by Mr. A K Tantia in 2005; it trades in railway
components materials used in railway wagon manufacturing. In April
2012, the company set up a facility to manufacture high-capacity
railway wagons at Baruipur (West Bengal). The plant has capacity
to manufacture 1500 wagons per annum. DCPL will be undertaking
jobwork for Besco. Besco manufactures railroad infrastructure with
facilities in West Bengal and Haryana. These products are used for
the manufacture of locomotives/wagons/coaches and rail tracks.
DURG EDUCATION: CRISIL Reaffirms 'D' Rating on INR63.1MM Loan
-------------------------------------------------------------
CRISIL's rating on the bank facility of Durg Education and
Charitable Society continues to reflect instances of delay by DECS
in servicing its term debt; the delays have been caused by the
society's weak liquidity resulting from cash flow mismatches.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 63.1 CRISIL D (Reaffirmed)
DECS also has modest scale of operations and geographical
concentration in revenue profile. These rating weaknesses are
partially offset by varied courses offered by the society ensuring
a large student base, and its promoters' experience in the
educational sector.
DECS was formed in 2002 in Raipur (Chhattisgarh) by the Lunia
family. The day-to-day operations of the society are managed by
Mr. Nalin Lunia. The society operates four colleges - Chhattisgarh
Agricultural College (CAC), Chhattisgarh Agricultural Engineering
College (CAEC), Chhattisgarh Nursing College (CNC), and
Chhattisgarh Engineering College (CEC).
G.D OVERSEAS: ICRA Reaffirms 'B+' Rating on INR18cr Loans
---------------------------------------------------------
ICRA has reaffirmed the long term rating at '[ICRA]B+' to the
INR18.00 crore fund based facilities of G.D Overseas.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based facilities 18.00 [ICRA]B+
The reaffirmation factors in firm's weak financial profile,
reflected by low profitability metrics, high gearing and
consequently weak debt coverage indicators. The rating also takes
into account high intensity of competition in the industry and
agro climatic risks, which can affect the availability of paddy in
adverse weather conditions and risks inherent in a partnership
firm. The rating however, favorably takes into account long
standing experience of promoters with long standing relationships
with several customers and suppliers and proximity of the mill to
major rice growing area which results in easy availability of
paddy.
G.D Overseas is a partnership firm, was set up in 1997 by Mr.
Darshan Lal, Mr. Tilak Raj and Mr. Ajay Kumar. GDO is engaged in
processing and export of basmati rice to countries in the Middle
East, however from January 2012 the firm is selling more than 90%
of its milled rice to M/S Tilda Rice. It has a plant at Karnal
(Haryana) which has a milling capacity of 10 tonnes per hour and a
sortex machinery with a capacity of 10 ton/hr. The firm has a
fully automated plant which was revamped in the year 2009-10.
Recent Results
During the financial year 2012-13, the firm reported a profit
after tax (PAT) of INR0.36 crore on an operating income of
INR64.49 crore as against PAT of INR0.27 crore on an operating
income of INR52.93 crore in 2011-12.
G I INDUSTRIES: CRISIL Reaffirms 'B+' Rating on INR50MM Loan
------------------------------------------------------------
CRISIL's ratings on the bank facilities of G I Industries Pvt Ltd
(GIIPL; part of the Goyal group) continue to reflect the Goyal
group's weak financial risk profile, marked by high gearing and
weak debt protection metrics, its large working capital
requirements, its susceptibility to volatility in foreign exchange
rates, and its exposure to other associate entities. These rating
weaknesses are partially offset by the extensive experience of the
Goyal group's promoters in the crude palm oil (CPO) trading
business.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B+/Stable (Reaffirmed)
Foreign Letter of
Credit 170 CRISIL A4 (Reaffirmed)
For arriving at its ratings, CRISIL has now combined the business
and financial risk profiles of GIIPL, A B Chem (India) [ABCI], HM
Overseas Pvt Ltd (HMOPL), and G H Crop Science Pvt Ltd (GHC),
together referred to as the Goyal group, as against its earlier
approach of consolidating only GIIPL and HMOPL, following the
management's revised stance. All these entities are now under a
common management, and have operational linkages as they have
common suppliers and customers. The entities also have significant
financial linkages as they extend support to each other to meet
their financial requirements.
Outlook: Stable
CRISIL believes that the Goyal group will continue to benefit over
the medium term from its promoters' extensive experience in the
CPO trading industry. The outlook may be revised to 'Positive' if
the group significantly scales up its operations while improving
its working capital management, leading to better liquidity.
Conversely, the outlook may be revised to 'Negative' if the Goyal
group's capital structure deteriorates, most likely because of
larger-than-expected capital withdrawals, increase in investments
in other associate entities, or a substantial increase in its
working capital requirements.
GIIPL was originally established in 1975 as a partnership firm by
three brothers' Mr. Surinder Pal, Mr. Bishnu Kumar, and Mr. Kamal
Kumar; the firm was reconstituted as a private limited company in
July 2010. GIIPL trades in edible oil, mainly CPO and mustard oil.
The company also trades in small quantities of spices, salt, and
other products. It also undertakes crushing of mustard seeds
through its two units in Bathinda (Punjab). In December 2010,
GIIPL started processing cattle feed.
Set up in 2008, ABCI manufactures pesticides and trades in CPO.
ABCI's pesticide manufacturing unit in Jammu (Jammu and Kashmir)
has an annual capacity of about 10,000 tonnes. Incorporated in
2009, GHC markets ABCI's pesticides and also trades in CPO.
HMOPL trades in CPO, non-edible oil, and palm fat. The company was
non-operational until 2009-10 (refers to financial year, April 1
to March 31). In October 2010, it acquired Goyal Traders, which
was in this line of business. Mr. Deepak Goyal and Mr. Rahul
Goyal, sons of Mr. Bishnu Kumar, are the directors of HMOPL, while
the operations are managed by their father.
GIIPL, on a standalone basis, reported a profit after tax (PAT) of
INR2.7 million on net sales of INR1489 million for 2012-13 (refers
to financial year, April 1 to March 31), as against a PAT of
INR3.0 million on net sales of INR827 million for 2011-12.
GLOBAL TANNING: CRISIL Reaffirms 'B+' Rating on INR53MM Loans
-------------------------------------------------------------
CRISIL's ratings on the bank facilities of Global Tanning
Industries continue to reflect GTI's small scale of operations and
average financial risk profile. These rating weaknesses are
partially offset by the promoters' extensive experience in the
leather goods industry.
Outlook: Stable
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 24.5 CRISIL B+/Stable (Reaffirmed)
Cash Credit 25 CRISIL B+/Stable (Reaffirmed)
Letter of Credit 3 CRISIL A4 (Reaffirmed)
Overdraft Facility 3.5 CRISIL B+/Stable (Reaffirmed)
Proposed Short Term
Bank Loan Facility 34 CRISIL A4 (Reaffirmed)
CRISIL believes that GTI will maintain its business risk profile
on the back of the promoters' extensive industry experience in the
leather goods industry. The outlook may be revised to 'Positive'
if the firm improves its scale of operations and profitability,
while maintaining its capital structure. Conversely, the outlook
may be revised to 'Negative' if GTI's financial risk profile
weakens because of lower-than-expected profitability, sizeable
working capital requirements, or a large debt-funded capital
expenditure (capex) programme.
Update
GTI's revenues for 2012-13 (refers to financial year, April 1 to
March 31) increased by around 30 per cent to INR297 million from
INR229 million in the previous year. The increase was driven by an
increase in export orders in 2012-13, on the back of demand for
leather products. For the first six months of 2013-14, the firm
registered revenues of around INR160 million and is likely to
record modest revenue growth for the full year 2013-14. GTI's
operating profitability deteriorated to 2.6 per cent in 2012-13
from 3.7 per cent a year ago, because of an increase in raw
material prices. The firm's operating profitability is likely to
remain modest over the medium term.
GTI's financial risk profile continues to be average, marked by a
modest net worth of around INR14 million as on March 31, 2013,
while its gearing remained high at 3.2 times as on March 31, 2013
(treating interest-free unsecured loans of INR34 million as on
March 31, 2013 from the promoters as neither debt nor equity). The
firm's debt protection metrics remained robust, with interest
coverage and net cash accruals to debt ratios at 3.0 times and
0.11 times, respectively, for 2012-13. The firm's liquidity
remains stretched, marked by low cash accruals, and incremental
working capital requirements resulting in full utilisation of its
bank lines with instances of overdrawn limits. However, GTI's
liquidity is supported by the absence of any term debt obligations
over the medium term.
GTI was set up in 2003 in Kolkata (West Bengal). The firm tans raw
hides and manufactures leather gloves. GTI is promoted by Mr.
Dilshad Elahi.
HILL CREST: CRISIL Rates INR300MM Long Term Loan at 'B+'
--------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the proposed
long-term bank loan facility of Hill Crest Resort & Spa Private
Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 300 CRISIL B+/Stable
The rating reflects the company's exposure to project
implementation risks. This rating weakness is partially offset by
the promoter's adequate financial flexibility and favourable
location of the project.
Outlook: Stable
CRISIL believes that Hill Crest will remain exposed to project
implementation risks over the medium term. The outlook may be
revised to 'Positive' if the company generates higher-than-
expected cash flows while maintaining key project milestones.
Conversely, the outlook may be revised to 'Negative' if Hill Crest
incurs project time or cost overruns, or does not receive timely
support from its promoters.
Hill Crest was incorporated in 2012. The company is promoted by
Mr. Debasish Chakraborty and his family, and has a 15-acre plot in
Karjat. The company is likely to use the plot for a mixed
development project, comprising of bungalows and a 5-star resort.
Hill Crest has tied-up with the US-based Carlson Rezidor Hotel
group, to manage the hotel's operations. The total project cost is
around INR1.11 billion and is likely to be completed by December
2015.
KAMAKSHI LAMIPACK: CRISIL Cuts Rating on INR152MM Loans to 'D'
--------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Kamakshi Lamipack Pvt Ltd to 'CRISIL D/CRISIL D' from 'CRISIL
B/Stable/CRISIL A4'. The downgrade reflects instances of delay by
KLPL in servicing its debt; the delays have been caused by the
company's weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL D (Downgraded from
'CRISIL A4')
Letter of Credit 25 CRISIL D (Downgraded from
'CRISIL B/Stable')
Long Term Loan 77 CRISIL D (Downgraded from
'CRISIL B/Stable')
KLPL also has a below-average financial risk profile, marked by a
highly leveraged capital structure, and modest scale of
operations. These rating weaknesses are partially offset by KLPL's
established regional position in the flexible packaging industry,
aided by its promoters' extensive industry experience.
KLPL, established in 1982, is engaged in the manufacture of
flexible packaging materials. The company's day-to-day operations
are managed by Mr. A L Chidambaram.
KLPL reported a net loss of INR1.9 million on an operating income
of INR291 million for 2012-13 (refers to financial year, April 1
to March 31), as against a net profit of INR0.4 million on an
operating income of INR321 million for 2011-12.
KIA TEXTILES: CRISIL Assigns 'B+' Rating to INR80MM Loans
---------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' ratings to the bank
facilities of KIA Textiles Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 80 CRISIL B+/Stable
The ratings reflect KTPL's average financial risk profile, marked
by low cash accruals, and its modest scale of operations in the
intensely competitive readymade garments industry with large
working capital requirements in the business. These rating
weaknesses are partially offset by the benefits that KTPL derives
from the extensive experience and funding support of its promoters
in the yarn trading industry.
Outlook: Stable
CRISIL believes that KTPL will benefit from the long-standing
experience of its promoters in the yarn trading industry and their
funding support. The outlook may be revised to 'Positive' in case
of an improvement in KTPL's business risk profile or scale of
operations, or in case of its better-than-expected profitability,
leading to improvement in cash accruals, thus leading to an
improvement in its financial risk profile. Conversely, the outlook
may be revised to 'Negative' in case of deterioration in KTPL's
financial risk profile due to lower-than-expected cash accruals,
higher-than-expected increase in working capital requirements or
any significant debt-funded capital expenditure (capex).
KTPL was incorporated in 2010 by Mr. S K Bhatia and his son Mr.
Jatin Bhatia. The company trades in cotton/polyester /blended
yarn. About 20 per cent of KTPL's sales are from the export
market, with the remaining being from the domestic market. The
company has been a consignment agent for polyester oriented yarn
(POY) manufactured by Indo Rama Ltd and Wellknown Polyesters Ltd
since June 2013.
KINGFISHER AIRLINES: CRISIL Reaffirms D Rating on INR55.82BB Loan
-----------------------------------------------------------------
CRISIL's ratings on bank loan facilities of Kingfisher Airlines
Ltd continue to reflect delays by KFAL in servicing its debt; the
delays have been caused by the company's weak liquidity and
continued losses at the operating level. Losses in the past six
years have resulted in a complete erosion of KFAL's net worth,
leading to its weak financial risk profile.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 8,940 CRISIL D (Reaffirmed)
Funded Interest
Term Loan 2,260 CRISIL D (Reaffirmed)
Long Term Loan 5,970 CRISIL D (Reaffirmed)
Rupee Term Loan 35,270 CRISIL D (Reaffirmed)
Short Term Loan 390 CRISIL D (Reaffirmed)
Working Capital
Term Loan 2,990 CRISIL D (Reaffirmed)
Incorporated in 2003, KFAL is a part of The UB group which
includes United Breweries Ltd, United Sprits Ltd, Mangalore
Chemicals and Fertilizers Ltd (rated 'CRISIL BBB+/Negative/CRISIL
A2'), and UB Engineering Ltd. KFAL is engaged in rendering
scheduled and unscheduled aircraft passenger and cargo services.
The airline started commercial operations in May 2005 operating a
flight from Mumbai to Delhi. It started its international
operations in September 2008 by connecting Bengaluru (Karnataka)
with London.
For 2012-13 (refers to financial year, April 1 to March 31), KFAL
reported a net loss of INR83.5 billion (INR23.3 billion for 2011-
12) on net sales of INR5 billion (INR54.85 billion). For the six
months ended September 30, 2013, it reported a net loss of
INR18.72 billion (INR14.04 billion for the corresponding period of
2012-13) on net revenues of INR0.0 (INR5.01 billion).
KK PROTEINS: ICRA Reaffirms 'B+' Rating on INR15cr Loans
--------------------------------------------------------
ICRA has reaffirmed the long-term rating of '[ICRA]B+' assigned to
INR15.00 crore fund based limits of K.K Proteins Private limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limits 15.00 [ICRA]B+ reaffirmed
The rating reaffirmation continues to be constrained by weak
financial profile of the company with dip in operating income due
to decrease in quantity sold; low profitability due to low value
additive nature of soya oil extraction process; moderate gearing
and weak coverage indicators. The rating is further constrained by
exposure to agro-climatic risks associated with the availability
of raw material hence pricing of raw material soyabean and
vulnerability of profitability to fluctuation in commodity price.
However, the rating favorably factors in the experienced
management; proximity to soyabean growing areas resulting in
savings on transportation costs and favorable demand prospects of
soya products.
Incorporated in 2006, K.K. Proteins Private Limited (KKPPL) is
engaged in trading, processing and manufacturing of Soybean & its
derivative products. The manufacturing unit is located in Ponnari
village of Adilabad district, Andhra Pradesh. The total installed
capacity of the plant is 250 tons per day.
KRR INFRA: ICRA Suspends 'D' Rating on INR84cr Loans
----------------------------------------------------
ICRA has suspended the long term rating of '[ICRA]D' assigned to
INR84.00 crore bank facilities of KRR Infra Projects 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.
N. K. SHARMA: CRISIL Cuts Rating on INR100MM Loan to 'D'
--------------------------------------------------------
CRISIL has downgraded its ratings on the bank facility of N. K.
Sharma Enterprises Ltd to 'CRISIL D' from 'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft Facility 100 CRISIL D (Downgraded from
'CRISIL B/Stable')
The downgrade in ratings reflects the instances of delays by NKS
in servicing its interest for the month of October 2013 and
November 2013. This has been on account of weak liquidity due to
lower-than-expected customer advances and cash flow mismatches.
CRISIL believes that NKS's debt repayment ability going forward
will be highly contingent upon level of customer advances and
management of its cash flows.
The ratings continue to reflect the exposure to risks related to
project implementation and project off take, and to risks and
cyclicality inherent in the Indian real estate industry. These
rating weaknesses are partially offset by the extensive experience
of NKS's promoters in the real estate industry.
NKS was set up in 2000 by the Zirakpur-based Sharma family. The
company is actively managed by its managing director Mr. N K
Sharma and his brothers, Mr. P K Sharma, Mr. Y K Sharma, Mr. D K
Sharma, and his father, Mr. V N Sharma. NKS is involved in the
development of residential and commercial projects, mainly in
Zirakpur.
NADIA CONSTRUCTIONS: CRISIL Cuts Rating on INR100MM Loan to 'D'
---------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Nadia Constructions Pvt Ltd to 'CRISIL D' from 'CRISIL
B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL D (Downgraded from
'CRISIL B/Stable')
The rating downgrade reflects instances of delay by NCPL in
servicing its debt; the delays have been caused by the company's
weak liquidity, driven by lower-than-expected bookings in its real
estate project, Durgapur Residency -- Phase 3, which adversely
affected its cash flows, and the absence of timely funding support
from its promoters.
NCPL is exposed to demand risk associated with its project and to
the cyclicality inherent in the Indian real estate industry.
However, the company benefits from the extensive industry
experience of its promoters.
NCPL was established in March 2008 by Mr. Saurav Saha, Mrs. Nadia
Saha, and Mr. Somnath Paul. The company undertakes real estate
development, and is currently constructing a residential complex,
Durgapur Residency - Phase 3, at Benachity, Durgapur (West
Bengal), comprising 12 blocks with 230 flats.
NAND ESTATE: ICRA Revises Rating on INR24cr Term Loan to 'B'
------------------------------------------------------------
ICRA has revised the long-term rating assigned to the INR24.00
crore term loan of Nand Estate Developers Pvt. Ltd. to '[ICRA]B'
from '[ICRA]B+'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-Based: Term 24.00 [ICRA]B, revised from
Loan [ICRA]B+
The rating revision factors in the significant time and cost over-
runs in NEDPL's hotel project owing to execution-related delays
and changes in project specifications. Further, the lack of
financial closure to fund increased cost exposes the project to
funding risk, which is accentuated by the fact that the debt
repayment is scheduled to commence from April 2014 as against
expected project completion in June 2014. Timely funding support
from promoters would be critical for debt-servicing and completion
of the project. The rating is also constrained by the high
competitive intensity in Agra due to presence of a number of
established hotels in the premium segment which is expected to
exert pressure on occupancies and room rentals.
The rating, however, continues to derive comfort from the
favourable location of the project, with proximity to main tourist
attraction Taj Mahal and tie-up with Wyndham Group which partly
alleviates the risk in operations and management to certain
extent.
Going forward, company's ability to minimise the time involved in
project completion, timely infusion of funds by promoters which
will be critical for project completion as well as to ensure debt
servicing in the medium term and generate adequate operating
metrics to achieve comfortable debt-coverage indicators, will be
the key rating sensitivities.
NEDPL is currently constructing a 153 room (increased from 128
rooms planned earlier) premium hotel at Fatehabad Road, Agra by
the name of Ramada Plaza. NEDPL has entered into franchise
agreement with Wyndham Hotel Group for the use of Ramada brand.
The hotel is currently under construction and expected to start
operations in June'2014 (as against scheduled COD of June 2013).
Due to changes in project scope and layout, construction cost for
the hotel has escalated to INR57.38 crore from INR41.10 crore
earlier. As on September 30, 2013; company has incurred 56% of the
revised project cost. Company's current operations involve trading
in land and plots around Agra region.
Wyndham Hotel group already operates a 160 room, 5 star hotel
(Wyndham Grand Agra) located at Rakabganj on Fatehabad Road.
Recent Results
In FY13, NEDPL reported an operating income (OI) of INR2.90 crore
with operating profits of INR1.53 crore and net profit of INR0.77
crore compared with OI of INR2.48 crore, operating profits of
INR0.58 crore and net profit of INR0.39 crore in FY12.
NEW ASIAN: ICRA Revises Rating on INR25cr Loans to 'B+'
-------------------------------------------------------
ICRA has revised the long-term rating assigned to the fund based
bank facility of INR7.00 crore and non-fund based bank facility of
INR18.00 crore of New Asian Construction Company to '[ICRA]B+'
from '[ICRA]BB'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit (CC) 7.00 Revised to [ICRA]B+
from [ICRA]BB
Non-Fund Based Limit 18.00 Revised to [ICRA]B+
(BG) from [ICRA]BB
The rating revision factors in the execution related delays on
nearly 70% of the outstanding order book which could impact
revenue growth; and a corporate guarantee of INR29.50 crore
equivalent to 3.04 times NACC's net-worth, extended towards the
debt availed by a group company, New Asian Infrastructure
Development Private Ltd. NAID is developing a small hydro project
in Maharashtra, and while repayment of NAID's debt commences from
April 2014, project commencement could get delayed, given the
pending completion of the transmission line and that water flow
through the project is yet to start. Moreover, the rating also
remains constrained by the small scale of operations, the
partnership nature of the entity, and the high sectoral,
geographical and client concentration risks, as 100% of the
outstanding order book is concentrated in the irrigation and dam
segment in the Ahmednagar District of Maharashtra, bagged from
various divisions of the Godavari Marathwada Irrigation
Development Corporation. However, the rating derives comfort from
the firm's long track record of more than four decades in the
construction industry.
New Asian Construction Company is a partnership firm incorporated
in 1967 to undertake construction of dams, power houses, pump
houses, canals and bridges. NACC is registered with Government
authorities in the A-1 category. The firm bids for large scale
irrigation projects through competitive bidding. NACC is managed
by Mr. Syed Abdur Rasheed and his two sons, Mr. Syed Abdur Zubair
and Mr. Syed Abdur Umair. Mr. Rasheed is a civil engineer and has
an extensive experience of 45 years in the construction industry,
particularly in the irrigation and dam segment. The management has
technical expertise, and is involved in the daily operation of the
business. A group company, New Asian Infrastructure Development
Private Limited (NAID), is developing a 7 MW hydro power project
at the foot of the Nilwande Dam on the Pravara River in
Maharashtra, on a Build, Operate and Transfer basis.
NEW ASIAN INFRA: ICRA Reaffirms 'B' Rating on INR29.5cr Loan
------------------------------------------------------------
ICRA has re-affirmed the rating of '[ICRA]B' assigned to the
INR29.50 crore long-term fund based bank facility of New Asian
Infrastructure Development Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit (TL) 29.50 [ICRA]B Re-affirmed
The rating re-affirmation factors in the weak power generation
potential of the project, with a low design plant load factor of
27%; delays in commissioning of the project with a time over-run
of 18 months from the initial commercial operations date (COD);
and an insufficient moratorium period as the repayment schedule of
the rated debt commences from April 2014, exposing the company to
repayment risks in the event of any delay in project completion.
The rating, however, derives comfort from low permitting risks, as
the requisite approvals and clearances for the project are all in
place; the moderate execution risk, as the civil construction of
the project is complete; and the project's eligibility for capital
subsidy from the Ministry of New and Renewable Energy (MNRE),
together with proceeds from Certified Emission Reductions (CER),
which are expected to generate additional cash flows for the
project. The firm power purchase agreement entered into with the
Maharashtra State Electricity Distribution Company Limited
mitigates off take risks for NAID.
New Asian Infrastructure Development Private Limited is a closely
held company promoted by Mr. Syed Abdur Rasheed and his sons Mr.
Syed Abdur Umair and Mr. Syed Abdur Umair in 2005. NAID is
developing a 7 MW hydro power project at Nilwande village, Taluka
Akole, Ahmednagar District, Maharashtra, on a Build-Operate-
Transfer basis. The company has signed a Hydro Power Development
Agreement with the Government of Maharashtra Water Resources
Department (GoMWRD) for a term of 30 years in August 2010. The
company also undertakes construction activities on a sub-contract
basis from its group concern, New Asian Construction Company,
which undertakes construction of dams, power houses, pump houses,
canals and bridges.
OM ENERGY: CRISIL Assigns B+ Rating to INR400MM Long Term Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of OM Energy Generation Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 400 CRISIL B+/Stable
Bank Loan Facility
The rating reflects OEGPL's exposure to risks related to
implementation of its ongoing project of setting up a hydropower
project. This rating weakness is partially offset by the extensive
experience of OEGPL's top management in setting up hydropower
projects, and the strong support that the company receives from
its parent group, the OPG group.
Outlook: Stable
CRISIL believes that OEGPL will continue to benefit over the
medium term from the favorable demand prospects of the power
industry. The outlook may be revised to 'Positive' if the company
stabilises its operations earlier than expected and within the
budgeted cost, thereby resulting in larger-than-expected cash
accruals and hence, improvement in its financial risk profile.
Conversely, the outlook may be revised to 'Negative' if OEGPL
registers significant time or cost overrun in its project,
resulting in delay in commencement of its operations, and as a
result, lower-than-expected cash accruals and deterioration in its
financial risk profile.
OEGPL, part of the OPG group, was incorporated in 2010 to execute
a 7-megawatt hydropower project in Chamba District (Himachal
Pradesh). The company is promoted by Mr. Ravi Gupta and his
family. Its day-to-day operations are handled by its director Mr.
Dalip Dua.
PGM INFRA: ICRA Suspends 'D' Rating on INR57.5cr Loans
------------------------------------------------------
ICRA has suspended the long term rating of '[ICRA]D' assigned to
INR54.50 crore bank facilities and short term rating of '[ICRA]D'
to INR3.00 crore bank facilities of PGM Infrastructures 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.
PRINCE MARKETING: ICRA Reaffirms 'B+' Rating on INR33cr Loans
-------------------------------------------------------------
ICRA has reaffirmed the long-term rating of '[ICRA]B+' assigned to
the INR33.00 crore, long-term loans and the short-term rating of
'[ICRA]A4' assigned to the INR25.00 crore, short-term, non-fund
based facilities of Prince Marketing [PM or 'the firm']. ICRA has
withdrawn the '[ICRA]B+' rating assigned to the INR15.00 crore
long-term, fund based facility and the '[ICRA]A4' rating assigned
to the INR7.50 crore, short-term, non-fund based facility of the
firm.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term, fund 15.00 [ICRA]B+ withdrawn
based limits
Long-term loans 33.00 [ICRA]B+ reaffirmed
Short-term, fund
based limits 7.50 [ICRA]A4 withdrawn
Short-term, non-
fund based limits 25.00 [ICRA]A4 reaffirmed
The rating takes into account the weak capital structure matrices
for the firm following two property acquisitions over the past
three years which were mainly debt funded. With accruals from low-
value, trading operations remain weak, and interest burden on term
loans remain high, liquidity profile continues to remain
stretched. Debt and interest coverage indicators have improved
over FY 2013, however, the continue to remain weak. Nevertheless,
ICRA notes the scope for future value-unlocking through sale of
two assets owned by the firm and association with Prince Group
which has enabled the firm to have strong relationships with
suppliers and distributors alike.
Prince Marketing is a partnership firm started in 2001 and is
primarily engaged in trading of raw materials utilized in plastic
manufacturing. The key products traded by PM are PVC resins, PVC
ball valve, and other petroleum products such as EVA, PPE and
HDPE. The firm is jointly held by Mr. Jayant Chheda (Managing
Director, PPFL) and family. The firm operates through three depots
in India at Bhiwandi, Haridwar and Indore. The Indore depot acts
as stocking warehouse for PPFL products which is likely to shut
down by end of FY 2014. The firm, being a part of the Prince
Group, enjoys good relationship with key PVC resin manufacturers
in India and in international markets and has developed a strong
market intelligence system to time purchases based on demand-
supply scenario of various products.
Recent Results
For the twelve months ending March 31, 2013, the firm has reported
profit before tax (PBT) of INR1.2 crore on an operating income of
INR138.1 crore as compared to a PBT of INR8.9 crore on an
operating income of INR100.8 crore for the twelve months ending
March 31, 2012.
R.D.GOEL: CRISIL Reaffirms 'B+' Ratings on INR139.4MM Loans
-----------------------------------------------------------
CRISIL's ratings on the bank facilities of R.D.Goel and Company
Private Limited continue to reflect the susceptibility of RDGCL's
operating margin to fuel price hikes and intense competition, and
its large working capital requirements. These rating weaknesses
are partially offset by the company's above-average financial risk
profile, marked by healthy debt protection metrics and moderate
gearing, and its established and diversified customer profile.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5 CRISIL A4 (Reaffirmed)
Cash Credit 85 CRISIL B+/Stable (Reaffirmed)
Term Loan 54.4 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that RDGCL will benefit over the medium term from
its established relationships with its customers. The outlook may
be revised to 'Positive' if the company enhances its scale of
operations and its profitability, while improving its capital
structure. Conversely, the outlook may be revised to 'Negative' in
case of pressure on RDGCL's revenues or profitability, or if the
company's financial risk profile deteriorates, most likely due to
stretched working capital cycle or large, debt-funded capital
expenditure (capex).
Incorporated in 1988, RDGCL is promoted by Mr. Ashok Goel and
family. The company is engaged in the road transportation business
with a fleet of 86 owned vehicles and 300 vehicles availed on
rent; it mainly operates on full-truck-load basis.
RADIANT LUBES: CRISIL Reaffirms 'B' Rating on INR137.5MM Loans
--------------------------------------------------------------
CRISIL's ratings on the bank facilities of Radiant Lubes Pvt Ltd
continue to reflect RLPL's modest financial risk profile and large
working capital requirements. These weaknesses are partially
offset by the extensive experience of the promoters in the
petrochemicals segment.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 52.5 CRISIL A4 (Reaffirmed)
Bill Discounting 30 CRISIL A4 (Reaffirmed)
Cash Credit 137.5 CRISIL B/Stable (Reaffirmed)
For arriving at the ratings, CRISIL has treated an unsecured loan
of INR27 million extended to RLPL by its promoters as neither debt
nor equity. These loans will be retained in the business and is
subordinated to bank debt.
Outlook: Stable
CRISIL believes that RLPL will maintain its stable business risk
profile over the medium term, on the back of its established
relations with suppliers and customers; and the promoters'
experience in the petrochemicals segment. The outlook may be
revised to 'Positive' if the company improves its profitability or
receives an equity infusion leading to a substantial improvement
in its capital structure and debt protection metrics. The outlook
may be revised to 'Negative' if RLPL reports a slowdown in revenue
growth or a significant decline in its profitability, or an
increase in its working capital requirements.
RLPL is a private limited company, incorporated in Nagpur
(Maharashtra) in 2000. The company refines petrochemicals,
recycles oils and trades polymers. The company was founded by Mr.
Deepak Bharadwaj and Mr. Vijay Jindal. Mr. Deepak Bharadwaj
manages the petrochemicals business, whereas Mr. Vijay Jindal's
son - Mr. Vishal Jindal - manages the polymers trading business.
The company has a manufacturing unit in Nagpur.
RLPL reported a profit after tax (PAT) of INR0.7 million on net
sales of INR1.0 billion for 2012-13 (refers to financial year,
April 1 to March 31), vis-a-vis a PAT of INR10 million on net
sales of INR0.9 billion for 2011-12.
RR FAB: CARE Cuts Rating on INR4.31cr Long Term Loan From 'BB-'
---------------------------------------------------------------
CARE revises/reaffirms the rating of the bank facilities of Rr Fab
Constructions of the short-term rating.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 4.31 CARE B+ Revised from
CARE BB-
Short-term Bank
Facilities 4.50 CARE A4 Reaffirmed
The ratings assigned by CARE are based on capital deployed by the
partners and the financial strength of the firm at present. The
rating may undergo change in case of withdrawal of capital or
unsecured loans brought in by the partners in addition to the
financial performance and other relevant factors.
Rating Rationale
The revision in the ratings takes into account the decline in
total operating income and elongated operating cycle with working
capital intensive nature of operations. Furthermore, the ratings
continue to be constrained by the constitution of the entity as a
partnership firm with small scale of operations, volatility in
input prices coupled with client and geographic concentration
risk. However, the ratings continue to derive strength from the
experienced management, improvement in profit margins during FY13
(refers to the period April 1 to March 31) and moderate order book
position.
The ability of the firm to increase its scale of operations by
diversifying its client base amidst the increasing competition and
managing its working capital will remain the key rating
sensitivities.
RR FAB Constructions, formerly known as R&R Fabricators, was
started in the year 1985 by Mr S Ramachandra as a proprietorship
concern for executing civil construction works. Subsequently, RR
FAB Constructions was converted into a partnership firm on May 05,
2010. Mr S Ramachandra and Mr R Somesh are serving as the partners
of RFC. RFC is engaged in the execution of civil construction
works like structural, road, ancillary, plumbing, drainage and
other electrical works in the state of Karnataka under direct
tender basis. The firm is currently executing civil construction
works for private and government entities and had an order book
worth INR32.31crore as on Dec. 11, 2013.
During FY13, RFC reported a PAT of INR0.31 crore on a total
operating income of INR10.75 crore as against a PAT of INR0.13
crore on a total operating income of INR15.09 crore in FY12. As
per the 8MFY14 (unaudited), the firm achieved a turnover of
INR7.17 crore.
SARIA INDUSTRIES: CRISIL Reaffirms B+ Rating on INR150MM Loans
--------------------------------------------------------------
CRISIL's ratings on the bank facilities of Saria Industries
continue to reflect SI's weak financial risk profile, marked by a
weak capital structure, below-average interest coverage ratio, and
a small net worth, and its small scale of operations in the rice
industry. These rating weaknesses are partially offset by the
extensive industry experience of SI's promoter.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 149 CRISIL B+/Stable (Reaffirmed)
Packing Credit 50 CRISIL A4 Reaffirmed
Proposed Long Term
Bank Loan Facility 1 CRISIL B+/Stable Reaffirmed
Outlook: Stable
CRISIL believes that SI will continue to benefit over the medium
term from its promoter's experience in the rice industry. The
outlook may be revised to 'Positive' if the firm reports higher-
than-expected accruals, backed by improvement in profitability
while sustaining its revenue growth. Conversely, the outlook may
be revised to 'Negative' in case of a decline in SI's
profitability or there elongation in the working capital cycle,
leading to pressure o liquidity.
Update
SI reported net sales of INR773 million for 2012-13 (refers to
financial year, April 1 to March 31) vis-a-vis INR560 million for
2011-12. The firm's revenues have shown an increasing trend with a
compound annual growth rate of around 56 per cent over the three
years through 2012-13, driven by increase in its trading
operations. For the eight months through November 2013, SI's
revenues are estimated at INR300 million. Increase in trading
operations, coupled with low value addition in rice processing and
volatility in paddy prices has led to a decline in SI's operating
profitability to 2.6 per cent in 2012-13 against 4 per cent in the
previous year.
SI's operations have remained working capital requirements,
however, the same were lower in 2012-13 than in the previous year,
reflected in its gross current assets (GCAs) of 54 days as on
March 31, 2013, against 108 days a year earlier. This is because
SI was able to sell off its inventory during the last quarter
financial year 2012-13. SI's financial risk profile has remained
below-average, with a gearing of 2.07 times as on March 31, 2013,
which improved from 5.8 times as on March 31, 2012, because of
lower contraction of external debt to fund its working capital
requirements due to low inventory levels. The gearing is expected
to remain high over the medium term because of its incremental
working capital requirement marked by increase in its scale of
operations. The firm's debt protection metrics have remained
subdued, with net cash accruals to total debt and interest
coverage ratios of 0.11 times and 1.78 times, respectively, for
2012-13. SI's financial risk profile is expected to remain subdued
over the medium term, largely constrained by its small net worth
and weak capital structure.
SI's liquidity has remained comfortable for the rating category
with moderate bank limit utilisation. The continuous infusion of
funds by promoters also provides cushion to its liquidity. The
firm does not have any term debt obligation over the medium term
and the accruals are expected to be utilised to fund its working
capital requirements.
SI, a proprietary concern based in Sirsa (Haryana), was
established in 1970 by Mr. Satya Narayan Saria. The firm is
engaged in processing and trading of basmati and non-basmati rice.
Its operations are managed by Mr. Satya Narayan Saria and his son,
Mr. Radheshyam Saria.
SHIV SHAKTI: ICRA Assigns 'B' Ratings to INR6.4cr Long Term Loans
-----------------------------------------------------------------
A rating of '[ICRA]B' has been assigned to the INR1.40 crore term
loan and INR5.00 crore cash credit facility of Shiv Shakti Ginning
Factory.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund
Based-Cash Credit 5.00 [ICRA]B assigned
Long Term Fund
Based-Term Loan 1.40 [ICRA]B assigned
The assigned rating is constrained by the limited value addition
in the cotton ginning and cottonseed crushing business, the highly
fragmented nature of the industry and the vulnerability of the
firm's profitability to movements in cotton prices which are
subject to seasonality and crop harvest. The rating also takes
into account the firm's weak financial risk profile characterized
by low profitability, aggressive capital structure and weak
coverage indicators. The rating also considers any potential
impact on net worth and gearing levels in case of any substantial
withdrawal from capital account given the constitution as a
partnership firm.
The rating, however, takes comfort from the favourable demand
outlook for cotton and its derivative products and the favourable
location of the firm's plant with respect to raw material
procurement. ICRA also positively considers the established track
record of the firm in the cotton industry.
Shiv Shakti Ginning Factory was established in 1991, and is
engaged in cotton ginning, pressing and crushing of cottonseeds to
produce cotton bales, cottonseed oil and cottonseed oil cake. The
manufacturing unit of the firm is located in Jasdan, Rajkot with
an installed capacity of producing 80 bales of ginned cotton in a
day in the ginning unit. The crushing unit is equipped with two
expellers with installed input capacity of crushing 3600 MTPA of
cottonseeds. SSGF is currently managed and owned by Mrs. Kajalben
P Gosai and Mr. Pratapgiri O Gosai.
Recent Results
During FY 2013, SSGF reported an operating income of INR26.17
crore and profit after tax of INR0.05 crore as against operating
income of INR23.19 crore and profit after tax of INR0.02 crore in
FY 2012.
SHIVALIK EXPORTS: CRISIL Reaffirms 'B' Rating on INR5MM Loan
------------------------------------------------------------
CRISIL's ratings on the bank facilities of Shivalik Exports
continue to reflect SE's small scale of operations in the
fragmented ready-made garments export business, high customer
concentration in its revenue profile, and its susceptibility to
volatility in raw material prices and foreign exchange rates. The
ratings also factor in the company's a weak financial risk
profile, marked by a small net worth, average gearing, and weak
debt protection metrics. These rating weaknesses are partially
offset by the extensive experience of SE's partners in the textile
business and its established relationships with reputed customers.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5 CRISIL A4 (Reaffirmed)
Export Packing Credit 7.5 CRISIL A4 (Reaffirmed)
Foreign Bill Purchase 20 CRISIL A4 (Reaffirmed)
Foreign Bill Purchase 5 CRISIL B/Stable (Reaffirmed)
Letter of Credit 15 CRISIL A4 (Reaffirmed)
Standby Line of Credit 10 CRISIL A4 (Reaffirmed)
Outlook: Stable
CRISIL believes that SE will continue to benefit over the medium
term from its partners' extensive industry experience. The outlook
may be revised to 'Positive' in case of significant improvement in
the firm's scale of operations and profitability, leading to more-
than-expected cash accruals. Conversely, the outlook may be
revised to 'Negative' in case of any pressure on SE's liquidity,
either because of a decline in its profitability leading to lower-
than-expected cash accruals, or significant increase in its
working capital requirements.
Set up in 1993, SE is a partnership firm that manufactures and
exports ready-made garments, mainly for women. It is managed by
Mr. Gangesh Agarwal and Mr. Ashok Agarwal, along with other family
members. SE manufactures and exports woven and knitted garments,
which include women's tops, blouses, and skirts; men's casual
shirts and trousers; and children's wear. The firm has the
capacity to manufacture about 100,000 garments per month at its
unit in Faridabad (Haryana).
SE reported a profit after tax (PAT) of INR2.06 million on net
sales of INR172.1 million for 2012-13, as against a PAT of INR1.41
million on net sales of INR148.5 million for 2011-12.
SHREE TRIBHUVAN: CRISIL Assigns 'B+' Rating to INR87.5MM Loans
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facility of Shree Tribhuvan Ispat Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 87.5 CRISIL B+/Stable
The rating reflects STIPL's modest scale of operations, exposure
to volatility in steel prices, and below-average financial risk
profile marked by modest net worth and average debt protection
metrics. These rating weaknesses are partially offset by the
benefits that STIPL derives from its promoters' extensive industry
experience and established relationships with prominent customers.
Outlook: Stable
CRISIL believes that STIPL will continue to benefit from its
promoters' extensive industry experience over the medium term. The
outlook may be revised to 'Positive' if significantly improved
scale of operations and profitability lead to stronger cash
accruals for STIPL, while it manages its working capital
requirements efficiently. Conversely, the outlook maybe revised to
'Negative' if lower than expected cash accruals or large working
capital requirements or debt-funded capital expenditure weaken the
company's liquidity.
Incorporated in 2005, STIPL manufactures mild steel ingots.
STIPL's manufacturing facilities are located in Bazpur,
Uttarakhand and the company is promoted by Mr. Vibhor Mittal and
Mr. Anand Agarwal and their family.
SHREE SAIKRISHNA: CRISIL Assigns 'B+' Ratings to INR80MM Loans
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank
facilities of Shree Saikrishna Cotton Industries.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 24.8 CRISIL B+/Stable
Cash Credit 40 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 15.2 CRISIL B+/Stable
The rating reflects the modest scale of SSCI's newly begun
operations in the highly competitive cotton ginning industry. The
rating also reflects SSCI's weak financial risk profile, marked by
high gearing and weak debt protection metrics, and exposure to
risks relating to adverse regulations. These rating weaknesses are
partially offset by the benefits that SSCI derives from its
partners' extensive experience in the cotton ginning industry, and
from its established relationships with customers and suppliers.
Outlook: Stable
CRISIL believes that SSCI will continue to benefit over the medium
term from its promoter-partners' extensive industry experience.
The outlook may be revised to 'Positive' if the firm's scale of
operations increases substantially, along with a improvement in
its profitability, or if its capital structure improves, driven
most likely by equity infusion or large cash accruals. Conversely,
the outlook may be revised to 'Negative', if the firm's financial
risk profile weakens, caused most likely by increase in working
capital borrowings, large debt-funded capital expenditure, or
disruption in its operations because of adverse regulatory
changes.
Set up in 2013, SSCI is promoted by the Patel family from Vijapur
(Gujarat), and partners. The firm is in the cotton ginning and
pressing business.
SHRI RIDDHI: CRISIL Rates INR77.5MM Term Loan at 'B+'
-----------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facility of Shri Riddhi Siddhi (Jaora) Infrastructure &
Builders Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 77.5 CRISIL B+/Stable
The rating reflects susceptibility of SRSIB's operating
performance to timely execution of the project and flow of
customer advances from current and future bookings. The rating
also factors in SRSIB's exposure to risks relating to cyclicality
in Indian real estate industry. These rating weaknesses are
partially offset by the extensive experience of the promoters in
the real estate industry.
Outlook: Stable
CRISIL believes that SRSIB will maintain a stable business risk
profile on the back of extensive experience of the promoters in
the real estate business. The outlook may be revised to 'Positive'
if the firm generates higher-than-expected cash flows resulting
from accelerated execution of its projects and improved flow of
advances. Conversely, the outlook may be revised to 'Negative' if
SRSIB's reports significantly lower-than-expected cash flow from
operations, either due to subdued response to the project or lower
than envisaged flow of advances, leading to deterioration in its
financial risk profile.
SRSIB, incorporated in 2004 as ' M V Jain Financial Consultants
Private Limited', is engaged in real estate and construction
business in Jaora, Madhya Pradesh The company's name was changed
to SRSIB in 2010. The day to day operations of the company are
overseen by the promoters, Mr. Bhoopendra Dangi, Mr. Sanjay
Bhandari, Mr. Mukesh Kumar Jain and Mr. Vijay Nahar
SRSIB reported a profit after tax (PAT) of INR 0.1 million on net
sales of INR 1.3 million for 2012-13 (refers to financial year,
April 1 to March 31) against a PAT of INR 0.02 million on net
sales of INR 1.3 million for 2011-12.
SREE BHARGAVI: CRISIL Assigns 'B+' Ratings to INR200MM Loans
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' ratings to the bank
facilities of Sree Bhargavi Agrotech.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 160 CRISIL B+/Stable
Inventory Funding
Facility 40 CRISIL B+/Stable
The rating reflects SBA's weak financial risk profile marked by
modest net worth, high gearing, and weak debt protection metrics
along with susceptibility of the firm's operating margin to
adverse government regulations and raw material price volatility.
These rating weaknesses are partially offset by the extensive
experience of SBA's management in the rice industry.
Outlook: Stable
CRISIL believes that SBA will continue to benefit over the medium
term from its management's extensive industry experience. The
outlook may be revised to 'Positive' if the firm's revenues and
profitability increase substantially, leading to an improvement in
its financial risk profile, or in case of significant infusion of
capital by the promoter, resulting in an improvement in SBA's
capital structure. Conversely, the outlook may be revised to
'Negative' if the firm undertakes aggressive debt-funded
expansions, or if its revenues and profitability decline
substantially or if the promoter withdraws capital from the firm,
leading to weakening in its financial risk profile.
Set up as a partnership firm in 1984, SBA is into processing of
rice. Based out of Adivipolam (Yanam), SBA is promoted by Mr. M.
Durga Prasad and Mr. M. Agastayya.
For 2012-13 (refers to financial year, April 1 to March 31), SBA
reported a profit after tax (PAT) of INR5.14 million on net sales
of INR900 million, as against a PAT of INR4.58 million on net
sales of INR710.6 million for 2011-12.
SREE DRG: CRISIL Reaffirms 'B+' Rating on INR95.2MM Loans
---------------------------------------------------------
CRISIL's ratings on the bank facilities of Sree DRG Vinyls
Industries continue to reflect Sree DRG's modest scale of
operations and below-average financial risk profile marked by weak
debt protection metrics. These rating weaknesses are partially
offset by the extensive experience of Sree DRG's promoters in the
synthetic leather business.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 60 CRISIL B+/Stable (Reaffirmed)
Long Term Loan 25.5 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 9.7 CRISIL B+/Stable (Reaffirmed)
Packing Credit 7.5 CRISIL A4 (Reaffirmed)
Outlook: Stable
CRISIL believes that Sree DRG will benefit over the medium term
from its promoters' extensive industry experience. The outlook may
be revised to 'Positive' if the firm ramps up its scale of
operations and generates more-than-expected cash accruals,
resulting in improvement in its financial risk profile.
Conversely, the outlook may be revised to 'Negative' in case of
lower-than-expected revenue and profitability, or substantially
large debt-funded capital expenditure, or lengthening in the
firm's working capital cycle, resulting in deterioration in its
financial risk profile.
Sree DRG, set up in 2009, manufactures synthetic leather cloth.
The firm is promoted by Mr. R G Chandrasekar and his family
members.
Sree DRG reported a profit before tax (PBT) of INR7.4 million on
net sales of INR218.5 million for 2012-13 (refers to financial
year, April 1 to March 31), against a PBT of INR4.2 million on net
sales of INR169.0 million for 2011-12.
SRI JAYAJOTHI: CARE Reaffirms B+ Rating on INR55.39cr LT Loan
-------------------------------------------------------------
CARE reaffirms the rating assigned to the enhanced bank facilities
of Sri Jayajothi Textile Mills Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 55.39 CARE B+ Reaffirmed
Facilities
Short-term Bank
Facilities 55.00 CARE A4 Reaffirmed
Rating Rationale
The ratings continue to be constrained by the weak financial
position of Sri Jayajothi Textile Mills Private Limited
characterized by the moderately high gearing levels, weak coverage
indicators and tight liquidity position. The ratings also take
into account the highly competitive nature of the textile
industry, inherent volatility associated with the raw material
prices and its impact on profitability. However, the ratings
derive strength from the long operational track record of the
company and experience of the promoters in the textile business.
The ratings also take note of the improvement in operational
performance in FY13 (refers to the period April 01 to March 31).
Going forward, the ability of the company to tide over the
unfavourable power supply situation, sustenance of the profit
margin, any increase in exposure to group companies and effective
management of working capital requirements would be the key rating
sensitivities.
Sri Jayajothi Textile Mills Private Ltd, established in 1990, is
engaged in the business of manufacturing cotton yarn at
Rajapalayam, Tamil Nadu. SJTML is a closely-held company, part of
the Jayavilas group of companies promoted by the late Mr T
Ramasamy Naicker and his family members. Mr TR Jayaraman, the
managing director (son of Mr T Ramasamy Naicker) oversees the day-
to-day activities of SJTML, assisted by his son, Mr J Rajasekaran.
SJTML has a total installed capacity of 109,776 spindles as on
Oct. 31, 2013.
During FY13, the company registered a PAT of INR1.34 crore on a
total operating income of INR231.3 crore.
SRI RAVI: ICRA Assigns 'B' Ratings to INR7cr Loans
--------------------------------------------------
ICRA has assigned a long-term rating of '[ICRA]B' to INR5.00 crore
fund based limits and INR2.00 crore unallocated limits of Sri Ravi
Gold Palace.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit Limits 5.00 [ICRA]B assigned
Unallocated Limits 2.00 [ICRA]B assigned
The assigned rating is constrained by the small scale of
operations in the gold retailing business; weak financial profile
of the firm as reflected by high debt levels & high working
capital intensity owing to high inventory requirement in retail
jewellery business and risks arising from partnership nature of
the firm. The rating is also constrained by the susceptibility of
profitability to adverse movement in gold prices; and risks
arising from its operations being limited to a single city -
Chirala, Prakasam District. The rating, however, takes into
account the long experience of the promoter in jewellery retailing
business and healthy long term demand prospect for the jewellery
retail industry in India.
Going forward, the firm's ability to scale up revenues while
managing its working capital requirements are the key rating
sensitivities from credit perspective.
Sri Ravi Gold Palace is established as a partnership firm in
February, 2013 by Mr. Ravi Kumar and other family members. The
firm is engaged in sale of gold and silver ornaments through a
single store with a total area of 857 sqft located in a shopping
mall owned by the promoter in Chirala in Prakasam district of
Andhra Pradesh. The total cost of setting up the store including
initial inventory funding is INR6.75 crore funded by cash credit
of INR5.00 crore and the remaining is partner's contribution. The
operations of the firm commenced in April, 2013.
SUVARNA FIBROTECH: CRISIL Reaffirms D Ratings on INR150MM Loans
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Suvarna Fibrotech Pvt
Ltd continue to reflect instances of delay by SFPL in servicing
its term loan; the delays have been caused by the company's weak
liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5 CRISIL D (Reaffirmed)
Cash Credit 86 CRISIL D (Reaffirmed)
Term Loan 59 CRISIL D (Reaffirmed)
SFPL also has large working capital requirements, a small scale of
operations, and high customer concentration in its revenue
profile. However, the company benefits from its promoter's
extensive track record in the fibre reinforced plastic (FRP)
business and its strong operational efficiencies.
SFPL was originally set up in 1985 as a proprietorship concern,
Suvarna Fibre Glass, by Mr. P I Verghese; the firm was
reconstituted as a private limited company with the current name
in 1989.
SFPL manufactures FRP components which are used in the automobile,
defence, chemical, windmill, marine, and infrastructure sectors.
SFPL reported a profit after tax (PAT) of INR1.3 million on net
sales of INR256 million for 2012-13 (refers to financial year,
April 1 to March 31), against a PAT of INR1.7 million on net sales
of INR319 million for 2011-12.
SWAMBHUNATH COLD: CRISIL Reaffirms 'D' Ratings on INR97MM Loans
--------------------------------------------------------------
CRISIL's ratings on the bank facilities of Swambhunath Cold
Storage Pvt Ltd (part of the Samantha group) continue to reflect
instances of delay by Swambhunath in servicing its debt; the
delays have been caused by the Samantha group's weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1.5 CRISIL D (Reaffirmed)
Cash Credit 64.0 CRISIL D(Reaffirmed)
Term Loan 5.4 CRISIL D(Reaffirmed)
Working Capital
Demand Loan 6.5 CRISIL D(Reaffirmed)
Working Capital
Term Loan 19.6 CRISIL D(Reaffirmed)
The Samantha group also has a weak financial risk profile, marked
by a small net worth, high gearing, and weak debt protection
metrics, and is exposed to risks related to the intensely
competitive cold storage industry in West Bengal. The group,
however, benefits from its promoters' extensive experience in the
cold storage business.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of Swambhunath and Shashadhar Cold Storage
Pvt Ltd. This is because the two companies, together referred to
as the Samantha group, are in the same line of business, under a
common management, and have significant operational and financial
synergies.
The Samantha group, based in Paschim Medinipur (West Bengal), is
engaged in cold storage of potatoes. Shashadhar was incorporated
in 2011 and Swambhunath in 1994. Both the companies operate
facilities for the cold storage of potatoes at Paschim Medinipur.
Mr. Swapan Samantha oversees the group's day-to-day operations.
The Samantha group reported a profit after tax of INR2 million on
net sales of INR27.1 million for 2011-12 (refers to financial
year, April 1 to March 31), against a net loss of INR0.4 million
on net sales of INR16.7 million for 2010-11.
TGI PACKAGING: CRISIL Assigns 'B' Ratings to INR128.5MM Loans
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of TGI Packaging Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 59.5 CRISIL B/Stable
Cash Credit 69 CRISIL B/Stable
Import Letter of 60 CRISIL A4
Credit Limit
Buyer Credit Limit 22 CRISIL A4
The ratings reflect TGI's below-average financial risk profile
marked by high capital structure and its small scale of operations
in intensely competitive packaging industry. These rating
weaknesses are partially offset by the benefits derived from the
extensive industry experience of promoters and established
relationship with key customers.
Outlook: Stable
CRISIL believes that TGI will continue to benefit over the medium
term from its promoters' industry experience. The outlook may be
revised to 'Positive' in case the company posts significant
improvement in revenues and profitability leading to higher-than-
expected cash accruals. Conversely, the outlook may be revised to
'Negative' if TGI undertakes a larger-than-expected, debt-funded
capital expenditure programme, or if a sharp decline in
realisations leads to significant deterioration in its financial
risk profile.
Set up in 2006 by Mr. Prashant Tikmani, TGI is engaged in the
manufacture of corrugated boxes.
TGI reported a profit after tax (PAT) of INR4.3 million on a net
sales of INR571.4 million during 2012-13 (refers to financial
year, April 1 to March 31) as against PAT of INR3.0 million on a
net sales of INR453.3 million during 2011-12.
TIRUPATI OIL: ICRA Suspends 'B-' rating on INR11cr Long Term Loan
-----------------------------------------------------------------
ICRA has suspended the '[ICRA]B-' rating assigned to the INR11.00
crore long term working capital limits of Tirupati Oil Industries.
The suspension follows ICRAs inability to carry out a rating
surveillance in the absence of the requisite information from the
company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term-Fund 11.00 [ICRA]B- suspended
Based Limits-
Cash Credit
Established in 1996, Tirupati Oil Industries is engaged in
ginning, pressing and crushing operations. The business is owned
and managed by Mr. Babubhai Patel and other family members. The
firm's manufacturing facility is located in Kadi, Dist Mehsana.
The firm has 42 ginning machines and 1 pressing machine having the
capacity to produce 350 cotton bales per day. The firm is also
equipped with 10 expellers having the capacity to produce 900 tons
of cottonseed oil per annum.
TRICOM INDIA: CARE Reaffirms 'D' Rating on INR46.9cr Loans
----------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Tricom India Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank
Facilities 35.65 CARE D Reaffirmed
Short term Bank
Facilities 11.25 CARE D Reaffirmed
Rating Rationale
The ratings continue to consider Tricom India Ltd (Tricom)'s
ongoing delays in servicing its term loan obligations and
persistent over-utilization of its working-capital limits.
Tricom India Ltd was promoted by Mr Chetan Kothari and Mr Hiren
Kothari in 1992 as a Non-Banking Finance Company. In February
2000, Tricom diversified into ITES/BPO business and the NBFC
business was hived off to another company in 2003. Presently, the
company has offices in India and US and is listed at BSE, NSE and
Luxemborg Stock Exchange.
The company's operations include non-voice BPO services such as
indexing services, litigation coding, e-publishing services,
services in the areas of medical billing and claim processing to
healthcare providers and insurance carriers etc.
During FY13 (refers to the period from April 1, 2012 to March 31,
2013), Tricom incurred a net loss of INR17.52 crore on a total
income of INR89.60 crore. Further during H1FY14, Tricom posted a
net loss of INR6.96 crore on a total income of INR28.28 crore.
YASHVEER CERAMICS: ICRA Reaffirms 'B+' Rating on INR3cr Loans
-------------------------------------------------------------
ICRA has assigned a long term rating of '[ICRA]B+' to the INR1.00
crore enhanced fund based bank facility of Yashveer Ceramics.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 3.00 [ICRA]B+ reaffirmed
(enhanced from 2.00)
Term Loans 5.25 [ICRA]B+ Outstanding
Outstanding Bank
Guarantee 1.00 [ICRA]A4 Outstanding
The ratings continue to factor in the improvement in operational
profile of YC resulting from its ability to scale up its
operations and achieve healthy plant utilization levels of 68% in
its first full year of operations and modest improvement in
profitability and capital structure. Nevertheless, the financial
profile continues to remain weak as reflected by low profitability
and coverage indicators and high gearing levels. The ratings
further continue to remain constrained by YC's modest track record
of operations and limited distribution network which along with
the high competitive intensity is likely to exert pressure on
margins. ICRA also notes the dependence of operations and cash
flows of the firm on the performance of the real estate industry
which is the main consumer sector and vulnerability of
profitability to increasing prices of gas and power.
The ratings however continue to consider the experience of the key
promoters in the ceramic industry and location advantage enjoyed
by YC giving it easy access to raw material.
Yashveer Ceramic is a wall tiles manufacturer with its plant
situated at Morbi, Gujarat. The firm was established in 2010, and
commenced commercial operations from May 2011. Yashveer Ceramics
is promoted by Mr. Vipul Patel having 10 years of experience in
ceramic industry along with other partners. The plant has an
installed capacity of 20,250 TPA. It currently manufactures wall
tiles of sizes 18"x12" and 12"x24" with the current set of
machineries and production facilities.
Recent Results
For the year ended March 31, 2013, Yashveer Ceramic reported
operating income of INR16.01 crore and profit before tax of
INR0.30 crore.
=========
J A P A N
=========
PANASONIC CORP: Fitch Upgrades Sr. Unsecured Ratings to 'BB+'
------------------------------------------------------------
Fitch Ratings has upgraded Panasonic Corporation's (Panasonic)
Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR)
and local-currency senior unsecured ratings to 'BB+' from 'BB'.
The Outlook is Stable.
The upgrade reflects the recovery in Panasonic's profitability and
improvement in its leverage measures, mainly due to on-going
extensive restructuring measures, particularly in the unprofitable
TV and smartphone businesses.
Key Rating Drivers
Margin Improvement: Panasonic has achieved meaningful improvement
in operating performance in the past three quarters, which Fitch
expects to continue. "We expect Panasonic's operating margin to
expand further with scheduled downsizing of its unprofitable
businesses (plasma TVs, retail mobile phone and semiconductor
businesses) and on-going restructuring efforts, including
consolidation of manufacturing facilities and labor force
rationalization. EBIT margin increased to 4% in the first half of
its financial year that ends March 2014 (1HFYE14), from 2.7% a
year earlier."
Shifting Business Focus: Panasonic will make the automotive- and
housing-related segments its key growth drivers, while scaling
down the unprofitable consumer technology segment. The company is
the top supplier for automotive infotainment systems and car
lithium-ion batteries. Panasonic also dominates the domestic
housing system market, particularly in electrical construction
materials. "We believe the company has the ability to generate
further growth from these segments."
Growth Opportunity in Automotive Business: Greater demand for
hybrid and all-electric vehicles will drive Panasonic's automotive
business in the future. Panasonic will be the key beneficiary of
growing hybrid electric vehicle (HEV) demand as it is the major
vendor to Toyota Motor Corporation (Toyota, A/Stable), the world's
leading HEV manufacturer. Panasonic also received orders from
Tesla Motors to supply 2bn lithium-ion battery cells during 2014-
2017, which is a significant increase from the previous agreement
(0.2bn cells during 2012-2013).
Weak Consumer Electronics Outlook: A risk to Panasonic's
operations still lingers in its consumer electronic businesses
(LCD TVs and digital cameras) as competition remains intense. To
mitigate this risk, Panasonic plans to focus more on the business-
to-business segment and shift away from consumer retail products.
This should reduce operating margin volatility. Operating profit
generated from non-consumer focused business accounted for around
69% of total profit during 1HFYE14.
Debt Reduction Continues: Gradual improvement in leverage is
likely in the near term. We expect Panasonic to have positive free
cash flow in FYE14, underpinned by its robust operating
performance, controlled working capital and modest capex. Debt
reduction also benefitted from the sale of non-core assets such as
healthcare business. We expect FFO-adjusted leverage to decline to
around 3.6x by FYE14 (FYE13: 4.6x) as debt reduction and operating
cash generation improvement continues.
Rating Sensitivities
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
- Slower-than-expected margin recovery leading to EBIT margins
below 2.5% on a sustained basis
- FFO-adjusted leverage sustained above 4.0x.
Positive: Future developments that may, individually or
collectively, lead to a positive rating action include:
- Sustained EBIT margin of greater than 3.5%
- FFO-adjusted leverage falling below 3.5x on a sustained basis
Full List Of Rating Actions
- Long-Term Foreign- and Local-Currency IDRs upgraded to 'BB+'.
Outlook is Stable.
- Local-currency senior unsecured rating upgraded to 'BB+'
- Short-Term Foreign- and Local-Currency IDRs affirmed at 'B'
====================
N E W Z E A L A N D
====================
ALLIED FARMERS: Settles NZ$2-Million Debt Owed to Speirs
--------------------------------------------------------
Stuff.co.nz reports that Allied Farmers has settled a
NZ$2 million debt owed to Palmerston North-based fresh-food
company Speirs Group.
NZX-listed Allied Farmers announced the planned settlement last
month, the report recalls.
The deal went unconditional on January 23 and would be completed
by the end of the month, the company said in a market
announcement.
According to the report, the farming services company's liability
dates back to a "put and call option" contract with Speirs from
2008. Last July, Speirs chose to exercise its "put" option,
meaning it wanted to cash up. The companies have agreed to settle
the obligation by issuing Speirs 14.7 million new Allied shares.
Stuff.co.nz relates that Allied has also agreed to pay Speirs
NZ$500,000 at the end of April 2016, which will be unsecured and
will not incur interest in the interim.
The deal is a related-party transaction because Speirs director
Nelson Speirs was until recently a director of Allied subsidiary
NFA, which is in liquidation, says Stuff.co.nz.
Since then, Allied has resolved a dispute with Inland Revenue over
a liquidation notice for $4.2m, and another dispute with a major
creditor, the report notes.
Based in New Zealand, Allied Farmers Limited (NZE:ALF) --
http://www.alliedfarmers.co.nz/-- is engaged in livestock, real
estate, finance, wool brokering and manufacturing (meat and
timber). Rural Services comprise livestock, merchandise and real
estate operations. The Company's Rural Services activities are
carried out in Taranaki, Waikato, King Country and Manawatu. Its
Financial Services activities are carried out by Allied
Nationwide Finance Limited in Auckland, Wellington and
Christchurch. Timber processing comprises the Company's
discontinued sawmilling operations.
Allied Farmers Limited reported an unaudited loss of
NZ$14.1 million for the year ended June 30, 2012, compared with
NZ$40.9 million in 2011. A significant part of this loss, NZ$10.3
million (last year NZ$34.1 million), largely relates to the
further impairment of assets acquired from Hanover and United
Finance.
The Hawera-based company made a loss of NZ$4.4 million in the year
to June 30, 2013.
====================
S O U T H K O R E A
====================
HANJIN SHIPPING: To Close Two Loss-Making Shipping Lines
--------------------------------------------------------
Yonhap News Agency reports that cash-strapped Hanjin Shipping Co.
said on January 24 it will close two loss-making container
shipping lines within the first half of the year.
The news agency relates that Hanjin said it plans to discontinue
its container shipping line service linking Asia and the Black Sea
(ABS) next month and its New Trans Atlantic (NTA) service between
the U.S. east coast and northern Europe in May.
"We have notified the shippers of our proposed pullout from the
two lines," Hanjin, as cited by Yonhap, said. "The closing of the
two lines is part of efforts to streamline money-losing shipping
lines."
Yonhap says Hanjin has been providing services on the ABS line on
a leased ship. It has used a 4,000-TEU vessel on the NTA line.
According to the report, the company said other members of the
CKYH alliance -- Cosco, "K" Line and Yang Ming -- will continue
their services on the NTA line.
As part of efforts to weather a credit crunch, Hanjin is pushing
ahead with the sales of its bulk vessel business division and its
stakes in terminals both at home and abroad, Yonhap adds.
As reported in the Troubled Company Reporter-Asia Pacific on
Nov. 18, 2013, Bloomberg News said Hanjin Shipping Co.'s Chief
Executive Officer Kim Young Min resigned, taking responsibility
for two successive years of losses at South Korea's largest
shipper and a delay in getting financial support from creditors.
The TCR-AP, citing The Korea Times, reported on Nov. 5, 2013, that
Hanjin Shipping said it will borrow KRW150 billion
($140 million) in financial support from Korean Air Lines, another
major affiliate of Hanjin Group, to stay afloat. Hanjin Shipping
spokeswoman Sonya Cho said Hanjin Shipping will use the money for
one year with an interest rate of 5.6 percent. Hanjin Holdings
owns a 36.2 percent stake in Hanjin Shipping under the wing of
Hanjin Group, the country's 10th-biggest shipping-to-
airline conglomerate by assets, the report discloses.
Korea-based Hanjin Shipping Co., Ltd. engages in the provision of
marine transportation services. The Company mainly provides four
categories of services: container service, bulk service, terminal
service and third party logistics (3PL) service.
===============
T H A I L A N D
===============
THAILAND: Turmoil to Weigh on Bank Resilience, Fitch Says
---------------------------------------------------------
Continuing political turmoil in Thailand is slowing economic
activity and could challenge the Thai banking sector, says Fitch
Ratings. A degree of political instability is already factored
into the ratings. But emerging credit pressure could rise in
spite of the recent imposition of a state of emergency which will
help manage the fallout from, but not resolve, the underlying
political deadlock between the ruling- and the principal-
opposition party.
Political turmoil is not new, and credit conditions have remained
resilient against a series of political upheavals and a major
flood in late 2011. Since the military coup which ousted then-
Prime Minister Thaksin Shinawatra, Thailand's political rupture
has triggered large-scale street protests by competing political
factions in 2008, 2009 and 2010. The Thai economy has withstood
these shocks reasonably well, and this is evident from its GDP
growth which Fitch estimates has averaged 3.0% between 2009 and
2013 -- slightly higher than the 'BBB' peer rating group median of
2.7%. In the meantime, there was no significant deterioration in
the intrinsic creditworthiness of major banks.
Nonetheless, prolonged weakening of activity since the onset of
anti-government protests in November 2013 is raising the
likelihood of asset-quality pressure at the banks. The financial
system's vulnerabilities have risen because it is more highly
leveraged than before, and the household sector's indebtedness in
particular has risen sharply to 80% of GDP in 3Q13, up from 60% at
end-2009. These trends have heightened credit sensitivities to a
downturn, and are largely reflected in Fitch's negative outlook on
the overall sector this year (stable in 2013). Specialized
financial institutions would be relatively more exposed, while
commercial banks are not immune to the build-up of leverage,
alongside a pick-up in concentration risks in the corporate
sector.
Banks' buffers would also be tested should the operating
environment and asset quality worsen. On a system-wide basis,
Thai banks have improved their Tier 1 capital ratio to 12.4% of
risk-weighted assets, up from 11.3% in 2009. But as profit growth
slows and credit costs rise, the recent build-up of loss-
absorption buffers could come under greater stress.
The imposition of the 60-day emergency from January 22 seeks to
limit the risk of widespread violence by political factions in the
run-up to -- and in the aftermath of -- the February 2 elections.
Meanwhile, the Bank of Thailand has signaled the maintenance of
accommodative policies to support monetary and credit conditions
amid heightened political uncertainty.
However, these measures will not resolve the underlying political
deadlock. As such, they could limit the economic fallout, but are
unlikely to avert growing credit risk in the banking sector.
=============
V I E T N A M
=============
VIETNAM BANK FOR AGRICULTURE: Fitch Affirms LT IDRs at 'B'
----------------------------------------------------------
Fitch Ratings has revised the Outlooks of two Vietnamese
government-owned banks - Vietnam Bank for Agriculture and Rural
Development (Agribank), and Vietnam Joint Stock Commercial Bank
for Industry and Trade (Vietinbank) - to Positive from Stable. At
the same time, the agency has affirmed the Long-Term Issuer
Default Ratings (IDRs) on the banks at 'B'.
This is an event-driven assessment focusing on sovereign support.
Fitch will review the Vietnamese banks' intrinsic financial
strength later this year.
Key Rating Drivers - IDRs, Support Ratings and Support Rating
Floors
The Outlook revision on both banks' IDRs reflects Fitch's view
that the sovereign's ability to provide extraordinary support, if
needed, is improving. It follows a revision in the Vietnam
sovereign's Outlook to Positive from Stable on January 23, 2014,
which takes into account the improvement in macroeconomic
stability and strengthening external finances, and continued
weakness in the banking sector.
The Long-Term IDRs, Support Ratings (SRs) and Support Rating
Floors (SRFs) of Agribank and Vietinbank incorporate Fitch's
expectation of likely extraordinary state support if needed
because both banks are among those most systemically important to
the domestic economy. Agribank and Vietinbank are the largest and
second-largest banks by assets in Vietnam, with dominant domestic
franchises. However, the timeliness of extraordinary support from
the government may be limited by its own finances, as reflected in
the 'B+' sovereign rating.
The Outlook revision on the sovereign rating has no impact on the
ratings for the rated privately owned banks as Fitch maintains its
view that state support cannot be relied upon.
Rating Sensitivities - IDRs, SRs and SRFs
Changes to Vietnam's sovereign rating as well as the government's
propensity to provide timely extraordinary support would likely
lead to corresponding changes to the ratings on Agribank and
Vietinbank. Deterioration in the banks' standalone credit
profiles is unlikely to impact their IDRs, given that their
Viability Ratings (VRs) are currently lower than their SRFs.
Key Rating Drivers And Rating Sensitivities - Senior Debt
Vietinbank's senior notes are rated at the same level as its Long-
Term IDR. This is because the notes constitute direct,
unsubordinated and senior unsecured obligations of the bank, and
rank equally with all its other unsecured and unsubordinated
obligations. In line with Fitch's criteria, Recovery Ratings are
assigned to entities with an IDR of 'B+' or below. Vietinbank's
senior debt will likely be impacted by changes to the bank's IDR.
The rating actions are as follows:
Agribank
- Long-Term IDR affirmed at 'B'; Outlook revised to Positive
from Stable
- Short-Term IDR affirmed at 'B'
- Support Rating Floor affirmed at 'B'
- Support Rating affirmed at '4'
- Viability Rating at 'ccc' - unaffected
Vietinbank
- Long-Term IDR affirmed at 'B'; Outlook revised to Positive
from Stable
- Short-Term IDR affirmed at 'B'
- Support Rating Floor affirmed at 'B'
- Support Rating affirmed at '4'
- USD250 million 8% notes due 2017 affirmed at 'B'; Recovery
Rating affirmed at 'RR4'
- Viability Rating at 'b-' - unaffected
VIETNAM: Fitch Affirms 'B+' Ratings; Revises Outlook to Positive
----------------------------------------------------------------
Fitch Ratings has affirmed Vietnam's Long-Term Foreign- and Local-
Currency Issuer Default Rating at 'B+'. The issue ratings on
Vietnam's senior unsecured foreign- and local-currency bonds are
also affirmed at 'B+'. The Outlooks on the Long-Term IDRs are
revised to Positive from Stable. The Country Ceiling is affirmed
at 'B+' and the Short-Term Foreign Currency IDR at 'B'.
Key Rating Drivers
The revision of the Outlook on Vietnam's IDRs to Positive from
Stable reflects the following key rating drivers:
- There has been an improvement in macroeconomic stability. The
economy has begun to recover following a difficult period
after austerity measures were implemented in early 2011 under
Resolution 11 to cool an overheated economy. Real GDP grew
5.4% in 2013 (5.2% in 2012) as both domestic and external
demand picked up. Fitch forecasts real GDP to grow 5.7% and
5.9% in 2014 and 2015 respectively. Meanwhile, consumer price
inflation has moderated, coming in at 6.6% in 2013 compared
with 9.1% in 2012 and 18.7% in 2011.
- The country's external finances have strengthened. Fitch
estimates that Vietnam recorded another large current account
surplus of 5% of GDP in 2013 (5.8% in 2012). Strong foreign
direct investment (FDI) inflows, at 6.8% of GDP in 2013,
continue to underpin the expansion in the manufacturing/export
sector. However, Fitch estimates that foreign-exchange
reserves stood at USD28.6bn at end-December 2013 (USD26.1bn at
end-2012), equivalent to 2.4 months of current external
payments, which is not a large buffer given Vietnam has
experienced episodes of significant capital flight in recent
years.
- The banking sector remains a source of weakness for Vietnam's
credit profile due largely to a high but unknown level of non-
performing loans (NPLs). The implementation of Circular 2,
which will apply stricter rules in classifying and
provisioning for NPLs was delayed until June 2014. However,
the authorities have begun to address the issue by creating a
national asset management company to help resolve NPLs.
Meanwhile, funding pressures in the banking sector have eased
due to divergent trends in loans and deposits, which resulted
in the system-wide loan-to-deposit ratio falling to 91.6% at
end-2Q13, down from 94.8% at end-2012.
- Fiscal policy has turned more expansionary over the past year.
Fitch estimates that Vietnam's budget (including off-budget
spending) posted a deficit of 5.8% of GDP in 2013 (4.8% in
2012). Fitch in turn estimates that gross government debt
rose to 42.6% of GDP at end-2013 (40.0% at end-2012). In
comparison, the 'B' and 'BB' peer rating group medians stood
at 42.4% and 35.1% in 2013 respectively.
Rating Sensitivities
The Positive Outlook reflects the following risk factors that may,
individually or collectively, result in an upgrade:
- Meaningful progress in reforming the banking sector, including
the successful implementation of Circular 2 and the transfer
of NPLs to the Vietnam Asset Management Company, contributing
to greater clarity on the potential cost of resolving NPLs
- Continued macroeconomic stability, characterized by an
environment of low and stable inflation and external
equilibrium
- Acceleration in structural reforms, particularly at state-
owned enterprises, which would not only help improve the
economy's competitiveness but also banks' asset quality
The Outlook is Positive. Consequently, Fitch's sensitivity
analysis does not currently anticipate developments with a
material likelihood, individually or collectively, of leading to a
downgrade. However, future developments that may, individually or
collectively, lead to a revision of the Outlook to Stable include:
- Higher-than-expected losses in the banking sector, which would
require large-scale sovereign support and potentially threaten
macro-financial stability
- Abandoning Resolution 11's macroeconomic stability objectives
and/or an adoption of policies that threaten price and
external stability
- A sharp, sustained deterioration in the public finances which
leads to a large increase in Vietnam's gross government
debt/GDP ratio
Key Assumptions
- Fitch assumes that Vietnam's authorities will continue to
adhere to policies aimed at achieving macroeconomic stability,
sustainable GDP growth, low and stable inflation, and
healthier current account balances.
- Fitch assumes that the potential cost of restructuring the
banking sector will be broadly in line with the agency's base
of 10% of GDP.
- Fitch assumes that political stability will persist in the
medium-term.
- Fitch assumes that the global economy will improve gradually
over the forecast period. The world's real GDP growth is
projected to rise 2.9% and 3.2% in 2014 and 2015, compared
with an estimate of 2.3% in 2013.
*********
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, and Peter A. Chapman,
Editors.
Copyright 2014. 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 ***