/raid1/www/Hosts/bankrupt/TCRAP_Public/140630.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, June 30, 2014, Vol. 17, No. 127
Headlines
A U S T R A L I A
GEMVALE ENTERPRISES: Worrells Solvency Appointed as Administrator
ILLAWARRA SERIES: Moody's Upgrades Rating on AUD2MM Notes to Ba1
LGL COMMODITIES: Placed in Administration
NINE ENTERTAINMENT: S&P Withdraws 'BB' Rating at Issuer's Request
RIDERS GROUP: Farnsworth Shepard Appointed as Administrator
TRIO CAPITAL: Former Investment Manager Jailed
TRITON TRUST: Fitch Rates AUD1.55 million Class F notes at 'Bsf'
WESTERN LIBERTY: Moody's Downgrades Senior Secured Rating to Ba2
C H I N A
GLORIOUS PROPERTY: S&P Affirms 'B-' CCR; Outlook Negative
INTIME RETAIL: S&P Revises Outlook to Negative & Affirms 'BB' CCR
I N D I A
ARHAM NON: CARE Assigns 'B+' Rating to INR11.55cr Bank Loan
ATUL BUILDERS: CRISIL Assigns 'B' Rating to INR270MM Term Loan
BHOLA NATH: CRISIL Reaffirms 'B-' Rating on INR40MM Loans
BHOLA NATH RAKESH: CRISIL Reaffirms 'B-' Rating on INR60.2MM Loan
COMPUTER ENGINEERS: CRISIL Assigns 'B+' Rating to INR50MM Loan
CONGLOME TECHNOCONSTRUCTIONS: ICRA Withdraws 'D' Loan Rating
EN VOGUE: ICRA Assigns 'B+' Rating to INR7.5cr Loans
ERNAD CONSTRUCTIONS: CRISIL Reaffirms 'B-' Rating on INR55MM Loan
GANPATI MEGA: CRISIL Raises Rating on INR40MM Loans to 'B+'
HARSHNA FRUITS: CRISIL Reaffirms 'B-' Rating on INR50MM Loan
MARK INFRASTRUCTURE: CRISIL Rates INR45MM Cash Credit at 'B+'
MAYA EXPORTS: CRISIL Assigns 'B-' Rating to INR130MM Bank Loan
MILANO IMPEX: CRISIL Assigns 'B+' Rating to INR40MM Cash Credit
MITTAL OCEAN: CRISIL Assigns 'B' Rating to INR65MM Loans
PUNJAB KESARI: CRISIL Reaffirms 'B' Rating on INR105MM Loans
PURAN CHAND: CARE Assigns 'B' Rating to INR33cr Bank Loan
RADHIKA COTEX: CRISIL Assigns 'B' Rating to INR80MM Loans
RUKMINIRAMA STEEL: CARE Assigns 'D' Rating to INR37.84cr Loans
SAGAR AGENCIES: CRISIL Cuts Rating on INR70MM Loans to 'B'
SBC MINERALS: CRISIL Assigns 'B+' Rating to INR150MM Loans
SERA EXPORTS: CRISIL Reaffirms 'B' Rating on INR60MM Loans
SHAMSHREE LIFESCIENCES: CRISIL Reaffirms B+ INR226.3M Loan Rating
SHIVAM CORP: CRISIL Reaffirms 'B-' Rating on INR200MM Loan
SINGLA TIMBERS: CRISIL Ups Rating on INR95MM Loans to 'B+'
SKA INFRASTRUCTURE: ICRA Cuts Rating on INR16.95cr Loans to 'D'
SPENTO FLOOR: CRISIL Upgrades Rating on INR100MM Term Loan to B+
SRE DHANALAKSHMI: CRISIL Reaffirms 'B+' Rating on INR90MM Loans
SREE AQUATICS: CRISIL Ups Rating on INR24cr Bank Loan to 'B'
TARAWADE LOGISTICS: CRISIL Assigns 'B+' Rating to INR10MM Loan
TEHRI PULP: CARE Upgrades Rating on INR81.44cr Loans to 'C'
TRILOK CHAND: CRISIL Cuts Rating on INR115MM Loans to 'D'
YASHAS FRP: CARE Assigns 'B+' Rating to INR3.68cr Bank Loan
J A P A N
EAST STREET: Moody's Upgrades Rating on 2 Classes of Notes to Ba2
HUMMINGBIRD SECURITISATION: S&P Ups Rating on JPY3BB Loan to 'BB'
N E W Z E A L A N D
SOUTH CANTERBURY FINANCE: Trial Set to End in October
TECTONIC CONSTRUCTION: Homeowners Lose Out as Firm Collapses
S O U T H K O R E A
DONGBU GROUP: Crisis Looms After Asset Sale Deal Collapses
STX CORP: STX Dalian Units File For Bankruptcy Protection
V I E T N A M
VIETNAM: S&P Affirms 'BB-' LT Sovereign Credit Rating
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A U S T R A L I A
=================
GEMVALE ENTERPRISES: Worrells Solvency Appointed as Administrator
-----------------------------------------------------------------
Jason Bettles -- jason.bettles@worrells.net.au -- & Raj Khatri --
raj.khatri@worrells.net.au -- of Worrells Solvency & Forensic
Accountants were appointed as administrators of Gemvale
Enterprises Pty Ltd on June 25, 2014.
A first meeting of the creditors of the Company will be held at
Level 5, HQ@Robina, 58 Riverwalk Avenue, in Robina, Queensland, on
July 7, 2014, at 10:30 a.m.
ILLAWARRA SERIES: Moody's Upgrades Rating on AUD2MM Notes to Ba1
----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of four
tranches of Illawarra Series 2011-1 CMBS Trust.
The affected ratings are as follows:
Issuer: Illawarra Series 2011-1 CMBS Trust
AUD5.17M Class B notes, Upgraded to Aaa (sf); previously on
Aug 30, 2011 Definitive Rating Assigned Aa2 (sf)
AUD8.41M Class C notes, Upgraded to Aa2 (sf); previously on
Aug 30, 2011 Definitive Rating Assigned A2 (sf)
AUD9.73M Class D notes, Upgraded to A3 (sf); previously on
Aug 30, 2011 Definitive Rating Assigned Baa2 (sf)
AUD2.03M Class E notes, Upgraded to Ba1 (sf); previously on
Aug 30, 2011 Definitive Rating Assigned Ba2 (sf)
Ratings Rationale
Moody's rating action on the notes is primarily a result of (1) an
increase in credit enhancement available to the affected notes,
and (2) the good performance of the securitized loans.
Since closing, the subordination levels for all the classes have
doubled. Subordination levels for the Class A, Class B, Class C,
Class D, Class E and Class F notes have increased to 35.4%, 30.2%,
21.8%, 12.1%, 10.1%, and 4.0% from 17.5%, 15.0%, 10.8%, 6.0%,
5.0%, and 2.0%, respectively.
In terms of loan characteristics, as of 30 April 2014, the pool
had a current weighted average loan to value ratio of 61% and
weighted average seasoning of 5.9 years. The over 90 days arrears
ratio was around 0.1% and had never exceeded 0.5%. Cumulative
losses for the pool remained at 0%.
While the mortgage pool has performed very well, the outstanding
pool of around 400 loans has become more concentrated when
compared with the closing pool. Currently, the top 10 obligors
make up 9.5% of the outstanding pool balance, compared with 5.8%
at closing.
Many of the obligors who are in the top 10 positions have loans
that used to have or still have interest-only periods. As such,
their loan balances have not amortized much. Therefore, we do not
upgrade Class F despite its doubled subordination and good
performance of the portfolio. The concentration risk also
constrains the magnitude of upgrades on Class D and Class E.
However, we do not expect such concentration to deteriorate
substantially. In the collateral pool, about a quarter of the
loans are still in their interest-only periods, and a large
majority of them will start to pay principal in 2014 and 2015.
Hence, their loan balance will decrease and the pool concentration
will stabilize.
The transaction is a securitization of a static portfolio of
Australian small- to medium-sized enterprise mortgage receivables
originated by IMB Ltd. The receivables are secured by registered
first mortgages over commercial and residential properties.
Factors that would lead to an upgrade or downgrade of the rating:
Factors that could lead to an upgrade or downgrade of the note
ratings are an improvement or a deterioration in the credit
quality, obligor concentration and performance of the collateral
pool.
Rating Methodology
The principal methodology used in this rating was "Moody's Global
Approach to Rating SME Balance Sheet Securitizations" published in
January 2014.
Loss and Cash Flow Analysis:
For rating this transaction Moody's used the following models: (1)
ABSROM (v.3.6) to model the cash flows and determine the loss for
each tranche and (2) CDOROM (V.2.12-2) to determine the loss
distribution.
More specifically, Moody's ABSROM cash flow model evaluates all
loss scenarios that are then weighted considering the
probabilities of such loss scenarios determined by CDOROM. As
such, Moody's analysis encompasses the assessment of stressed
scenarios.
Moody's used CDOROM to determine the loss distribution for this
transaction. The Moody's CDOROM model is a Monte Carlo simulation
which takes borrower specific Moody's default probabilities and
recoveries as inputs. Each borrower reference entity is modeled
individually with a standard multi-factor model incorporating
intra- and inter-industry correlation. The correlation structure
is based on a Gaussian copula. In each Monte Carlo scenario,
defaults and recoveries are simulated.
Stress Scenarios:
In its base case, Moody's considered a portfolio with a default
probability equivalent to a Ba1 rating and a recovery rate
equivalent to a 40% decline in the property value. Additionally,
we considered stress cases by assuming worse borrower credit
quality and lower loan recoveries. The lower recoveries reflect
(1) the stressed value of the properties securing the loans, and
(2) a lack of historical recovery data provided by the originator.
LGL COMMODITIES: Placed in Administration
-----------------------------------------
Emma Field and Rob Harris at The Weekly Times report that LGL
Commodities, which was an unsecured creditor of insolvent grain
traders Sapphire (SA) Pty Ltd and Convector Grain, went into
administration early this month.
Convector failed last year, owing about 240 creditors more than
AUD15 million, while Sapphire, which was an unsecured creditor of
Convector, collapsed in March with losses of about AUD13 million,
the report notes.
The report, citing Australian Securities and Investments
Commission documents, relates that an external administrator was
appointed to LGL Commodities Pty Ltd on June 17.
Andrew Yeo of Pitcher Partners is listed as the administrator of
the company, the report discloses.
LGL Commodities lost money in the Sapphire and Convector Grain
collapses, according to The Weekly Times.
According to a creditor list seen by The Weekly Times, the company
owes about AUD2.1 million to secured and unsecured creditors.
About 80 unsecured creditors are owed AUD1.37 million, with grain
broker AgFarm the largest unsecured creditor, the report notes.
NINE ENTERTAINMENT: S&P Withdraws 'BB' Rating at Issuer's Request
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it had withdrawn its
'BB' ratings on Nine Entertainment Co. Holdings Ltd. (NEC) and
NEC's associated debt issues, at the request of NEC. The rating
withdrawal follows the repayment of all outstanding rated bonds.
At the time of withdrawal, the outlook on the 'BB' long-term
rating was positive.
RIDERS GROUP: Farnsworth Shepard Appointed as Administrator
-----------------------------------------------------------
Adam Farnsworth of Farnsworth Shepard was appointed as
administrator of The Riders Group Pty Ltd on June 25, 2014.
A first meeting of the creditors of the Company will be held at
Level 5, 2 Barrack Street, July 7, 2014, at 10:00 a.m.
TRIO CAPITAL: Former Investment Manager Jailed
----------------------------------------------
A former investment manager with links to the failed firm Trio
Capital, was on June 27 sentenced to 25 months jail for making
false statements resulting in his business receiving more than
AUD500,000 in payments.
Tony Maher, who changed his name from Paul Gresham, pleaded guilty
in October 2013 to making the statements regarding the valuation
of investments made by the ARP Growth Fund (ARP) over two years.
At the time he owned and controlled PST Management Pty Ltd, the
company that acted as the investment manager of ARP.
Mr. Maher, 60, of Katoomba, was charged with 20 offences.
Appearing in the District Court of NSW, Mr. Maher was sentenced to
25 months jail. He will serve 15 months before being eligible for
parole.
ASIC Commissioner John Price said, "Mr Maher's conduct fell below
an acceptable standard.
"Gatekeepers, like directors, company officers, auditors,
investment advisers and financial planners, who think they can
flout the law, should think again."
The Commonwealth Department of Public Prosecutions prosecuted this
matter.
Since ASIC's investigation started on Oct. 2, 2009, more than 11
people have either been jailed, banned from providing financial
services, disqualified from managing companies or have agreed to
remove themselves from the financial services industry for a total
of more than 50 years. Two agreed to lifetime bannings.
In February 2012, ASIC accepting an enforceable undertaking (EU)
from Mr. Maher, preventing him from ever again working in the
Australian financial services industry or managing a corporation.
About Trio Capital
Trio Capital was formerly the trustee of five superannuation
entities and the responsible entity for 25 managed investment
schemes, including the Astarra Strategic Fund. The Astarra
Strategic Fund was a fund of hedge funds, which in December 2009
had reported assets of $125 million. Investors in the Astarra
Strategic Fund included several superannuation trusts managed by
Trio Capital as well as self-managed superannuation funds and
direct investors.
The Astarra Strategic Fund invested in several questionable
overseas hedge funds, mostly based in the Caribbean. The
Australian Securities & Investments Commission commenced an
investigation into Trio Capital in October 2009 over concerns
about the legitimacy of its investments. Trio Capital was placed
into administration on Dec. 16, 2009, and on April 16, 2010, the
NSW Supreme Court ordered that the Astarra Strategic Fund be
wound up. Since this time the liquidator of Trio Capital has
been unable to recover the vast majority of the investments made
by the Astarra Strategic Fund.
Investigations into Trio Capital are continuing by both ASIC and
the Australian Prudential Regulation Authority.
TRITON TRUST: Fitch Rates AUD1.55 million Class F notes at 'Bsf'
----------------------------------------------------------------
Fitch Ratings has assigned ratings and Outlooks to Triton Trust
No. 2 Bond Series 2014-P's residential mortgage-backed floating-
rate notes as listed below. The ratings are as follows:
AUD106.6 million Class A1 notes: 'AAAsf'; Outlook Stable
AUD24.0 million Class A2 notes: 'AAAsf'; Outlook Stable
AUD4.0 million Class B notes: 'AAsf'; Outlook Stable
AUD3.0 million Class C notes: 'Asf'; Outlook Stable
AUD3.75 million Class D notes: 'BBBsf'; Outlook Stable
AUD3.7 million Class E notes: 'BBsf'; Outlook Stable
AUD1.55 million Class F notes: 'Bsf'; Outlook Stable
AUD3.2 million Class G notes: NR
The notes, due December 2044, will be issued by Perpetual
Corporate Trust Limited as trustee for Triton Trust No. 2 in
respect of Bond Series 2014-P.
At the cut-off date, 30 April 2014, the total collateral pool
consisted of 559 loans, totaling approximately AUD148.3m.
Key Rating Drivers
Key Pool Characteristics: The weighted-average (WA) seasoning of
the portfolio is 95 months with an average current loan/value
ratio (LVR) of 69.4% (indexed LVR is 59.6%). The transaction has a
proportion of loans that are interest only (32.6%), and investment
loans make up 51% of the pool by balance. The portfolio is well
spread geographically.
Rating Sensitivity
Unexpected decreases in residential property values, increases in
the frequency of foreclosures, and loss severity on defaulted
mortgages could produce loss levels higher than Fitch's base case,
which could in turn result in potentially negative rating actions
on the notes. Fitch has evaluated the sensitivity of the ratings
to increased defaults and decreased recovery rates over the life
of the transaction.
Any significant increase in defaults, losses or delinquencies and
decreases in recovery rates away from base case assumptions may
result in future negative rating actions.
Included as an appendix is a description of the representations,
warranties, and enforcement mechanisms.
WESTERN LIBERTY: Moody's Downgrades Senior Secured Rating to Ba2
----------------------------------------------------------------
Moody's Investors Service has downgraded the senior secured rating
of Western Liberty Group Finance Pty Ltd (WLGF) to Ba2 from Ba1.
The outlook on the rating remains negative.
WLGF is the financing vehicle for Western Liberty Group Pty Ltd,
which is a special purpose entity set up to design, construct,
operate, and provide long term maintenance for Perth Courts in
Western Australia under a public private partnership (PPP).
Ratings Rationale
"The rating downgrade reflects continued refinancing challenges
facing WLGF due to prevailing credit margins remaining materially
above the levels incorporated in the original rating" says Mary
Anne Low, a Moody's Analyst.
WLGF has outstanding bonds of AUD77 million, which were issued in
2006 at a credit margin that remains below those prevailing in the
current market. The bond has a scheduled maturity in 2018 and a
legal maturity in 2020.
"These refinancing challenges, plus WLGF's extremely high
financial leverage, position the company's credit profile at a
level that is no longer consistent with its previous rating", adds
Low.
"Although the final maturity date of the bonds is still a few
years away, WLGF has very limited financial flexibility, given its
high financial leverage, coupled with its inability to increase
its revenues to provide the required coverage of increased debt
service costs," says Low.
WLGF's rating has incorporated its shareholder's support by
stopping equity distributions since late FY2013 and Moody's
understands that this will also occur in FY2015. Moody's
acknowledges the supportive aspect of this initiative. That being
said, as the proximity to maturity draws nearer, the absence of
any further committed capital restructure plans despite the
sustained improvement in prevailing margins will add further
challenges to the Ba2 rating. Consequently, Moody's has been
transitioning WLGF's rating over the last three years to reflect
the increasing pressure on refinancing risk as time to maturity
shortens.
WLGF's rating continues to consider its predictable cashflow
generation prior to the refinance, given the project's low
business risk profile underpinned by an availability-based revenue
stream from the State of Western Australian (State; Aaa negative)
and extensive subcontracting of its performance obligations at the
courts. The rating has also taken into account the improvement in
operational performance and establishment of a sound operational
track record which Moody's expects to continue, and should provide
support to low cash flow volatility.
The negative outlook on WLGF's rating reflects its continuing
refinancing challenges, and the expectation of further downward
rating movement over time as time passes and the opportunity to
provide further meaningful equity support diminishes.
The rating will also likely to be downgraded if the rating of the
State is downgraded.
The rating is unlikely to see any positive momentum in the absence
of a committed plan that addresses the refinancing task in 2018.
The principal methodology used in this rating was Operating Risk
in Privately-Financed Public Infrastructure (PFI/PPP/P3) Projects
published in December 2007.
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C H I N A
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GLORIOUS PROPERTY: S&P Affirms 'B-' CCR; Outlook Negative
---------------------------------------------------------
Standard & Poor's Ratings Services said that it had affirmed its
'B-' long-term corporate credit rating on China-based developer
Glorious Property Holdings Ltd. The outlook is negative. S&P
also affirmed its 'cnB-' long-term Greater China regional scale
ratings on the company. At the same time, S&P affirmed its 'CCC+'
long-term issue rating and 'cnCCC+' Greater China regional scale
rating on the company's senior unsecured notes.
S&P affirmed the ratings to reflect its view that Glorious'
financial performance will likely remain weak over the next 12
months due to the company's slow execution, sluggish sales, and
significant short-term debt. These factors may further weaken
Glorious' liquidity. The company's sizable land bank and low land
costs temper these weaknesses.
Glorious' project and sales execution continues to be slow, in
S&P's view. The company faced delays in project launches and low
deliveries in the past year. Contracted sales fell 33% to Chinese
renminbi (RMB) 7.3 billion in 2013, from RMB10.9 billion a year
earlier. Furthermore, contracted sales in the first five months
of 2014 fell 51% to about RMB1.7 billion, compared with the same
period last year. In S&P's base case, it estimates the figure to
be RMB6 billion-RMB7 billion for 2014.
Glorious' "vulnerable" business risk profile reflects the
company's weakening sales and margins in recent years. Glorious'
established market position in Shanghai and leading position in
Nantong, with a relatively high average selling price, temper
these weaknesses. However, the company is exposed to revenue
concentration risk.
"We expect Glorious' profitability to remain weak in 2014,
reflecting the impact of intensifying market competition on
property pricing and the company's weak execution," said Standard
& Poor's credit analyst Christopher Yip. Glorious' EBITDA margin
was 13.5% for 2013, a significant decrease from 22.9% in the
previous year and materially below S&P's expectation. The EBITDA
margin will be 14%-18% for 2014, in S&P's base case.
S&P believes Glorious is vulnerable to tightening of credit
conditions because of its high reliance on new borrowings to meet
short-term payment obligations. The proportion of short-term debt
has decreased to about 28% in 2013, from about 39% in 2012. S&P
estimates that the proportion fell further in 2014. However,
Glorious' overall leverage has increased by about 20% in 2013 to
RMB19.1 billion, raising the company's debt-to-EBITDA ratio to
17.3x in 2013 from 8.5x in 2012. S&P assess Glorious' financial
risk profile as "highly leveraged."
S&P expects Glorious' capital structure and cash flow coverage to
remain weak over the next year after deteriorating in the past two
years because of poor sales, rising debt, and lower margins. In
S&P's base case, it estimates the debt-to-EBITDA ratio to remain
at 17.5x-18.5x in the next year, with EBITDA interest coverage at
0.2x-0.7x.
Glorious' liquidity is "weak," as defined in S&P's criteria. S&P
expects the company's liquidity sources to cover about 65% of
liquidity uses over the next 12 months.
Glorious' liquidity position could weaken because of declining
sales and significant short-term debt. The company also has
US$300 million offshore senior unsecured notes due in October
2015.
"The negative outlook reflects our expectation that Glorious'
liquidity may remain weak over the next six to 12 months because
of continuing weak property sales and low level of profitability,"
said Mr. Yip. "We also expect the company's debt to remain high,
leading to high leverage and low coverage ratios."
S&P could lower the rating if Glorious fails to improve its
liquidity due to weak sales or further increases its debt. S&P
may also lower the rating if the company faces difficulty in
securing refinancing for its existing debt, meeting its
operational obligations, or if its cash balance declines
significantly.
S&P' could revise the outlook to stable if Glorious enhances its
liquidity and financial performance. This could happen if the
company improves execution to increase property sales
significantly, reduces and extends leverage, and stabilizes profit
margins.
INTIME RETAIL: S&P Revises Outlook to Negative & Affirms 'BB' CCR
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it revised its rating
outlook on Intime Retail (Group) Ltd. to negative from stable. At
the same time, S&P affirmed its 'BB' long-term corporate credit
rating on Intime and 'BB' rating on the company's senior unsecured
notes. In line with the outlook revision, S&P lowered its Greater
China regional scale rating on the China-based department store
operator and on the notes to 'cnBB+' from 'cnBBB-'.
"We revised the outlook to negative to reflect our view that
Intime's financial leverage could remain high for the rating over
the next 12 months, given its aggressive expansion appetite," said
Standard & Poor's credit analyst Lillian Chiou.
Intime's debt-to-EBITDA ratio increased to 5.6x at the end of 2013
from 4.2x in 2012, primarily because the company signed a large
amount of new operating leases to secure future store locations.
S&P expects Intime to maintain a large number of operating leases
and high capital expenditure to support its aggressive expansion
plan. The company is likely to open at least five to six stores
each year for the next two years and maintain a balanced portfolio
of self-owned and leased stores.
The affirmed rating on Intime reflects the company's exposure to a
highly fragmented industry and competitive operating environment,
weaker consumer sentiment on a slowing economy, and the negative
impact of the government's crackdown on extravagance. The
company's good positions in niche markets, solid revenue growth
momentum, good operating efficiency, and strong operational cash
flow generation from its concessionaire model partly offset the
challenges. S&P assess the company's business risk profile as
"fair."
"In our opinion, Intime can sustain its revenue growth and
improved EBITDA margin over the next 12 months, which could lower
its debt leverage somewhat. This is supported by the company's
good growth prospects from its new stores, store expansion plan,
and shift to more profitable brands or merchandise," said Ms.
Chiou.
S&P expects Intime's revenue concentration in Zhejiang to remain
high, but concentration risk from its flagship store has abated.
As of end-2013, the top store accounted for about 15% of total
gross sales proceeds (GSP), and S&P expects the ratio to drop to
close to 10% in the next five years. However, sales from Zhejiang
should continue to account for more than 70% of total GSP in the
next two years. S&P expects most of the company's new stores to
be outside Zhejiang, so revenue concentration should decline over
time.
Intime's "significant" financial risk profile reflects the
company's high leverage to support its aggressive growth plan.
This is partly offset by good cash flow generation from its
concessionaire business model. Under S&P's base case, it expects
the company's financial risk profile to be on a deleveraging trend
over the next 12 months as EBITDA continues to increase. S&P also
believes Alibaba's plan to inject capital into Intime through
share placement and investment in convertible bonds could improve
Intime's capital structure and financial flexibility. However,
S&P has not reflected the potential equity injection in its base
case.
S&P could lower the rating if Intime's financial leverage doesn't
reduce as it expects. This could happen if: (1) the company's
sales at new stores are significantly lower than S&P currently
expects; (2) EBITDA margin declines materially; or (3) the company
takes on more aggressive debt-funded expansion or signs more
operating leases than we anticipate. A ratio of debt to EBITDA
remaining above 5x over the next 12 months could trigger a
downgrade.
S&P could revert the outlook to stable if Intime maintains a good
operating performance while executing its expansion plan with
financial discipline, and continues to improve its financial
position, in particular its capital structure, such that the ratio
of debt to EBITDA drops below 5x, and maintains a deleveraging
trend.
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I N D I A
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ARHAM NON: CARE Assigns 'B+' Rating to INR11.55cr Bank Loan
------------------------------------------------------------
CARE assigns 'CARE B+/CARE A4' ratings to bank facilities of Arham
Non Woven Pvt Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 11.55 CARE B+ Assigned
Long-term/Short-term Bank
Facilities 3.00 CARE B+/CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities of Arham Non Woven Pvt
Ltd are primarily constrained on account of the project
implementation risk associated with the ongoing debt funded capex,
working capital intensive nature of operations and its presence in
a competitive and fragmented textile industry. However, the
ratings derive strength from the long experience of the promoters
in the textile industry, support derived from the already
established market by group companies and availability of benefits
under Technological Upgradation Fund (TUF) Scheme.
The ability of ANWPL to successfully complete the ongoing capex
within stipulated time period without any cost overrun will
be the key rating sensitivity.
Surat-based ANWPL was incorporated in January 2014 by its key
promoters, viz, Mr Dharmesh Jain and Mr Nishant Daga,
primarily to manufacture spun bond non-woven fabric. Currently,
ANWPL is in the process of setting up infrastructure facilities
at its plant located at Mangrol (Surat). The promoters proposes to
install imported machinery called 1.6 spun bonded meltblown
non-woven line (SMS) with an installed capacity of 3,000 metric
tonnes per annum (MTPA) for manufacturing of nonwoven fabric. This
machinery is proposed to be purchased on high seas basis from M/s
Radiant India, Surat for which order has been placed by ANWPL. The
project is currently at nascent stage of implementation.
ANWPL's group companies, viz, M/s Jill Mill Jari House, Jill Mill
Jari House Pvt Ltd, Jill Mill Non Woven Pvt Ltd and Rameshwari
Prints Pvt Ltd are also engaged in the manufacturing of various
textile products such as embroidery jari, non-woven fabric, dyeing
and printing and trading in cloth.
Credit Risk Assessment
Key promoter having experience of more than a decade in the
textile industry
The management of ANWPL is rested in the hands of its promoters,
viz, Mr Dharmesh Manekchand Jain and Mr Nishant Mahavir Chand
Daga. Mr Dharmesh Jain, a commerce graduate, has an experience of
more than a decade in the field of manufacturing of jari, dying
and printing of fabrics. Mr Nishant Daga, a commerce graduate, has
an experience in trading activity of art silk fabrics since the
past two years. Both the promoters propose to handle
responsibility of overall management of ANWPL. Furthermore, the
promoters are also actively engaged in associate companies. The
oldest company in the group is RPPL which is into dying and
printing business since 1991. Other entities namely JMJH and
JMJHPL were established in 2008 and 2012 respectively to
manufacture jari and JMNWPL was established in 2011 to manufacture
non-woven fabric.
Benefits available from already established market by group
companies
ANWPL's group companies, namely, JMJH, JMJHPL, JMNWPL and RPPL are
engaged in similar line of business in the textile industry. The
group companies are engaged in manufacturing and supplying its
range of non-woven fabric products and other jari products to its
customers engaged in diverse industries such as textile,
construction, agriculture, personal care and pharmaceutical for
wide purposes such as insulation, roofing, sofa and mattress,
pillow cover, bouffant caps, shoe cover, dry and wet wipers, bags
for storing vegetables and grains, garbage bags, vacuum bags,
tarpaulin bags. The group companies generally procure raw
materials, viz, polypropylene (PP) and filler for manufacturing of
non-woven fabrics from well-known companies such as Reliance
Industries Ltd, Hindustan Petroleum Corporation Ltd, etc. The
promoters of ANWPL are associated with these group companies since
long and thus they have developed good relationship with customers
and suppliers.
Government benefits
The manufacturing plant, located at Mangrol (Surat), is eligible
to receive certain benefits under TUFS of Gujarat Textile Policy
2012. ANWPL is eligible for interest subsidy benefits at the rate
of 5% from Central Government (CG) and 6% from Government
of Gujarat (GoG) and capital subsidy at the rate of 10% from CG on
purchase of machinery.
Ongoing debt funded capex
The total outlay of project is estimated at INR16.45 crore which
is to be funded through term loan of INR11.55 crore and promoters'
contribution of INR4.90 crore in term of equity share capital.
Furthermore, management proposes to bring in INR1.75 crore in the
form of unsecured loan and INR0.35 crore in the form of equity
share capital for the purpose of managing working capital
requirement after commencement of operations. In addition to
above, the management has also got the cash credit limit of INR3
crore sanctioned from the bank.
The capital structure of ANWPL is expected to remain highly
leveraged with debt-equity ratio of 3.66 times and overall gearing
ratio of 4.48 times on total debt of INR16.30 crore, moderate
equity share capital of INR5.25 crore and low net-worth base of
INR3.64 crore as on March 31, 2015. Furthermore, solvency position
represented by term debt to GCA and total debt to GCA is expected
to stand vulnerable at 40.49 times and 49.62 times respectively as
on March 31, 2015, mainly because of very low cash accruals and
high debt level.
ANWPL has already acquired a land at Mangrol (Surat) on rental
basis on which erection and commissioning work of plant and
machinery is expected to start from August 2014 and finish by
October 2014. The management plans to start its commercial
production from November 2014. Initially ANWPL plans to
manufacture products related to pharmaceutical industry with an
aim to increase its product base such as packaging products in
future. Against order of proposed machinery, ANWPL has already
made advance payment of INR7.30 crore through term loan of INR5.35
crore and own contribution of INR1.95 crore during May 2014.
Working capital intensive nature of operations ANWPL's operations
are projected to remain working capital intensive due to its
presence in the textile industry. Management expects no credit
period from suppliers on purchase of raw material. On the other
hand, ANWPL will be required to offer credit period of 60 to 90
days to its potential customers and average inventory holding
period is also expected to range between 30 to 45 days during
FY15. Furthermore, this kind of business involves high working
capital intensity which would require blockage of working capital
in inventory and debtors and thus management of those funds would
become crucial for management.
Presence in fragmented and competitive industry
The textile industry in India is highly fragmented with the
presence of a large number of small and medium scale units. Due to
high degree of fragmentation, small players hold very low
bargaining power against both its customers as well as its
suppliers resulting in such companies operating at very thin
profit margins.
Raw material price fluctuation risk
As the demand for non-woven fabric in India is expected to go up
in future, demand for main raw materials, viz, PP and filler
will also rise accordingly. Being a petrochemical product, price
of PP depends on price of crude oil which has shown fluctuating
trend in past. Hence, all these factors aggregately expose
operating margin to raw material price volatility risk.
ATUL BUILDERS: CRISIL Assigns 'B' Rating to INR270MM Term Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facilities of Atul Builders - Pune (AB).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 270 CRISIL B/Stable
The rating reflects the firm's high project risks, with most of
its projects in the initial phase of construction, with low
bookings resulting in low customer advances. The rating also
factors in the firm's exposure to intense competition and to risks
and cyclicality inherent in Indian real estate industry. These
rating weaknesses are partially offset by the promoters' extensive
experience in the real estate sector, along with their funding
support and established brand presence in Pune (Maharashtra).
Outlook: Stable
CRISIL believes that AB will benefit from the promoters' extensive
industry experience and their funding support over the medium
term. The outlook may be revised to 'Positive' if the firm
improves its cash inflows, with timely project completion, and
enhanced customer bookings. Conversely, the outlook may be revised
to 'Negative' if the firm's liquidity is constrained by project
time or cost overruns, or low customers advances resulting in
significantly low cash inflows.
AB was established by Mr. Ashok Chordia in Pune (Maharashtra) in
1984. The firm is a part of the Pune-based Chordia group, and is a
real estate developer. AB is implementing two residential
projects: Solitaire V and Solitaire VI and one commercial project
HQ which would be partly occupied by AB and partly leased out. The
firm also has three upcoming residential projects ' Solitaire VII,
Solitaire VIII and Solitaire IX. Besides, AB operates in the
hospitality sector, and owns Ambience Hotel in Pune.
BHOLA NATH: CRISIL Reaffirms 'B-' Rating on INR40MM Loans
---------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Bhola Nath
Naresh Kumar (BNNK; part of the Harshna group) continues to
reflect the Harshna group's weak liquidity, marked by significant
loans and advances extended to affiliate concerns; low cash
accruals, high bank limit utilisation, and weak financial risk
profile.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 38.5 CRISIL B-/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 1.5 CRISIL B-/Stable (Reaffirmed)
The rating also factors in the group's modest scale of operations
in an intensely competitive industry. These rating weaknesses are
partially offset by the extensive industry experience of the
Harshna group's promoters and the benefits that the group is
expected to derive from operational synergies and support that the
entities will derive from each other.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of Harshna Fruits (HF), BNNK, Harshna Ice
& Cold Storage (HICS), and Bhola Nath Rakesh Kumar (BNRK). This is
because these entities, collectively referred to as the Harshna
group, are in the same line of business, have close intra-group
operational and financial linkages, including fungible cash flows,
and are under a common management.
Earlier, for arriving at its rating, CRISIL had combined the
business and financial risk profiles of HF, BNNK, HICS, BNRK, and
Harshna Naturals (HN). The change in analytical approach is due to
change in business linkages and less operational synergies of HN
with the Harshna group. This is also due to the different
ownership structure of HN as compared to other entities of the
group.
Outlook: Stable
CRISIL believes that the Harshna group will benefit from the
extensive experience of its promoters as commission agents in the
cold storage industry and from demand for cold storage services in
the domestic market. However, the group's liquidity will be
constrained in the near term by large incremental working capital
requirement and funding support to affiliate concerns. The outlook
may be revised to 'Positive' if the group increases its scale of
operations and improves its profitability, leading to larger-than-
expected cash accruals and improved liquidity. Conversely, the
outlook may be revised to 'Negative' if the group's receivables
increase significantly, leading to further deterioration in
liquidity or if its sales or profitability declines.
Update
The Harshna group is estimated to report an operating income of
around INR361 million in 2013-14 (refers to financial year,
April 1 to March 31) vis-a-vis INR252 million in 2012-13. The
revenue growth is driven primarily by growth in HF due to
penetration of retail stores, resulting in increase in demand. The
growth is also supported by addition of new customers and
established relations with suppliers and customers. The group's
operating margin is estimated to be healthy at around 12.5 per
cent owing to synergies that the group derives from its integrated
nature of operations. The profitability is expected to remain at a
similar level over the medium term; but the same will also remain
exposed to fluctuation in fruit prices.
The Harshna group's liquidity remains weak marked by near full
utilisation of bank lines in 2013-14. The liquidity is also
constrained by low net cash accruals expected to be in the range
of INR20 million to INR25 million over the medium term against
repayment obligations of around INR19.5 million. Loans and
advances extended by the group to affiliate concerns estimated at
INR56 million as on March 31, 2014, further constrains the
liquidity. The financial risk profile is expected to remain weak
with gearing expected at around 3.5 times and interest coverage
ratio at around 1.6 times, over the medium term. This is due to
small net worth, net cash accruals, and large incremental working
capital requirements. The group's working capital requirements are
expected to remain stretched owing to large debtors estimated at
97 days as on March 31, 2014, primarily due to long realisation
period in HICS. The working capital requirements are expected to
remain large over the medium term due to large debtors and
increase in scale of operations.
The Harshna group was established in 1993 by Mr. Rakesh Bhola Nath
Kohli and Mr. Naresh Bhola Nath Kohli, when they established BNRK
and BNNK. Both the firms are commission agents for trading in
apples in Delhi's Azadpur mandi. In 1999, the group decided to
establish its own cold storage facility in Sonipat (Haryana), for
which it established HICS in the same year. HICS currently has a
multi-product cold-storage facility, with capacity of 11500
tonnes, along with ripening chambers. In 2004, the group set up
HF, which supplies fruits to retail stores.
The Harshna group's profit after tax (PAT) and operating income
are estimated at INR8 million and INR361 million, respectively,
for 2013-14; it reported a PAT of INR8.5 million on operating
income of INR252 million for 2012-13.
BHOLA NATH RAKESH: CRISIL Reaffirms 'B-' Rating on INR60.2MM Loan
-----------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Bhola Nath
Rakesh Kumar (BNRK; part of the Harshna group) continues to
reflect the Harshna group's weak liquidity, marked by significant
loans and advances extended to affiliate concerns; low cash
accruals, high bank limit utilisation, and weak financial risk
profile.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 60.2 CRISIL B-/Stable (Reaffirmed)
The rating also factors in the group's modest scale of operations
in an intensely competitive industry. These rating weaknesses are
partially offset by the extensive industry experience of the
Harshna group's promoters and the benefits that the group is
expected to derive from operational synergies and support that the
entities will derive from each other.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of Harshna Fruits (HF), Bhola Nath Naresh
Kumar (BNNK), Harshna Ice & Cold Storage (HICS), and BNRK. This is
because these entities, collectively referred to as the Harshna
group, are in the same line of business, have close intra-group
operational and financial linkages, including fungible cash flows,
and are under a common management.
Earlier, for arriving at its rating, CRISIL had combined the
business and financial risk profiles of HF, BNNK, HICS, BNRK, and
Harshna Naturals (HN). The change in analytical approach is due to
change in business linkages and less operational synergies of HN
with the Harshna group. This is also due to the different
ownership structure of HN as compared to other entities of the
group.
Outlook: Stable
CRISIL believes that the Harshna group will benefit from the
extensive experience of its promoters as commission agents in the
cold storage industry and from demand for cold storage services in
the domestic market. However, the group's liquidity will be
constrained in the near term by large incremental working capital
requirement and funding support to affiliate concerns. The outlook
may be revised to 'Positive' if the group increases its scale of
operations and improves its profitability, leading to larger-than-
expected cash accruals and improved liquidity. Conversely, the
outlook may be revised to 'Negative' if the group's receivables
increase significantly, leading to further deterioration in
liquidity or if its sales or profitability declines.
Update
The Harshna group is estimated to report an operating income of
around INR361 million in 2013-14 (refers to financial year, April
1 to March 31) vis-a-vis INR252 million in 2012-13. The revenue
growth is driven primarily by growth in HF due to penetration of
retail stores, resulting in increase in demand. The growth is also
supported by addition of new customers and established relations
with suppliers and customers. The group's operating margin is
estimated to be healthy at around 12.5 per cent owing to synergies
that the group derives from its integrated nature of operations.
The profitability is expected to remain at a similar level over
the medium term; but the same will also remain exposed to
fluctuation in fruit prices.
The Harshna group's liquidity remains weak marked by near full
utilisation of bank lines in 2013-14. The liquidity is also
constrained by low net cash accruals expected to be in the range
of INR20 million to INR25 million over the medium term against
repayment obligations of around INR19.5 million. Loans and
advances extended by the group to affiliate concerns estimated at
INR56 million as on March 31, 2014, further constrains the
liquidity. The financial risk profile is expected to remain weak
with gearing expected at around 3.5 times and interest coverage
ratio at around 1.6 times, over the medium term. This is due to
small net worth, net cash accruals, and large incremental working
capital requirements. The group's working capital requirements are
expected to remain stretched owing to large debtors estimated at
97 days as on March 31, 2014, primarily due to long realisation
period in HICS. The working capital requirements are expected to
remain large over the medium term due to large debtors and
increase in scale of operations.
About the Group
The Harshna group was established in 1993 by Mr. Rakesh Bhola Nath
Kohli and Mr. Naresh Bhola Nath Kohli, when they established BNRK
and BNNK. Both the firms are commission agents for trading in
apples in Delhi's Azadpur mandi. In 1999, the group decided to
establish its own cold storage facility in Sonipat (Haryana), for
which it established HICS in the same year. HICS currently has a
multi-product cold-storage facility, with capacity of 11500
tonnes, along with ripening chambers. In 2004, the group set up
HF, which supplies fruits to retail stores.
The Harshna group's profit after tax (PAT) and operating income
are estimated at INR8 million and INR361 million, respectively,
for 2013-14; it reported a PAT of INR8.5 million on operating
income of INR252 million for 2012-13.
COMPUTER ENGINEERS: CRISIL Assigns 'B+' Rating to INR50MM Loan
--------------------------------------------------------------
CRISIL has revoked the suspension of its rating on the long-term
bank facilities of Computer Engineers and has assigned its 'CRISIL
B+/Stable/CRISIL A4' ratings to these facilities. CRISIL had
suspended the rating on December 17, 2013, as CE had not provided
the necessary information required for reviewing the rating. The
company has now shared the requisite information enabling CRISIL
to assign a rating.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 20 CRISIL A4 (Assigned;
Suspension revoked)
Cash Credit 50 CRISIL B+/Stable (Assigned;
Suspension revoked)
The rating reflects CE's large working capital requirements and
its exposure to risks related to its tender-based business model
and to intense competition. These rating weaknesses are partially
offset by the extensive experience of the firm's proprietor in the
civil construction industry and funding support from proprietors.
Outlook: Stable
CRISIL believes that CE will continue to benefit over the medium
term from the extensive industry experience of its proprietor. The
outlook may be revised to 'Positive' in case of a substantial
increase in the firm's revenue and sustained improvement in its
profitability, supported by a significantly larger order book.
Conversely, the outlook may be revised to 'Negative' in case of a
decline in CE's revenue, profitability, and working capital
management, leading to further weakening of its financial risk
profile. Any significantly higher-than-expected investments in
group companies may also result in a revision in the outlook to
'Negative'.
CE was established in 1990 as a proprietorship firm by Mr. Chetan
Mehta. The firm undertakes civil construction contracts for the
Brihan Mumbai Corporation and Maharashtra Housing and Area
Development Authority in and around Mumbai.
CE reported a net profit of INR9.3 million on net sales of INR151
million for 2012-13 (refers to financial year, April 1 to
March 31), as against a net profit of INR8.6 million on net sales
of INR156 million for 2011-12.
CONGLOME TECHNOCONSTRUCTIONS: ICRA Withdraws 'D' Loan Rating
------------------------------------------------------------
ICRA has withdrawn the '[ICRA]D' rating assigned to the INR10.0
crore term loans of Conglome Technoconstructions Private Limited.
The rating has been withdrawn at the request of the company as the
term loan has been repaid in full. There is no amount outstanding
against the rated instruments.
EN VOGUE: ICRA Assigns 'B+' Rating to INR7.5cr Loans
----------------------------------------------------
ICRA has assigned a long-term rating of [ICRA]B+ to the INR0.60
crores of term loans, INR4.75 crores fund based limits and INR2.15
crores unallocated limits of En Vogue Wood Working (P) Ltd. ICRA
has also assigned a short-term rating of [ICRA]A4 to the INR4.50
Crores non-fund based limits of Envogue.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits-
Term Loan 0.60 [ICRA]B+ Assigned
Fund Based Limits 4.75 [ICRA]B+ Assigned
Unallocated Limits 2.15 [ICRA]B+ Assigned
Non Fund Based Limits 4.50 [ICRA]A4 Assigned
The assigned ratings factor in the long experience of the
promoters in the home furnishings export industry and the
company's diversified product profile. The ratings are however
constrained by intense competition from low-cost countries which
restricts the company's pricing flexibility and exposure to
economic slowdown in its key markets. The ratings also take
cognizance of the company's exposure to the risk of foreign
exchange rate fluctuations on the un-hedged portion of its
receivables and vulnerability of profitability to volatility in
prices of raw materials. The ratings also factor in moderate
financial profile of the company as reflected by its small scale
of operations, high gearing level and weak debt protection
indicators. Moreover, the company plans to take additional term
loans in order to fund the purchase of a new factory in Noida;
this debt funded capex is likely to exert pressure on the capital
structure and debt coverage indicators of the company going
forward.
En Vogue Wood Working (P) Ltd. was established in the year 2004 by
Mr. Gopal Chand Jain. The company is engaged in manufacturing of
home furnishings for export. The company exports home furnishings
like cushion covers, aprons, quilts, proofs and runners. Apart
from home furnishings, the company also manufactures furniture
which is mainly sold to retail customers and corporate customers
in India. The company has three factories- two in Noida (15000 sq.
ft in Sector 2 and 10000 sq. ft in Sector 5) and one in Greater
Noida (60000 sq feet).
Recent Results
The company reported Profit After Tax (PAT) of INR0.24 crores on
Operating Income (OI) of INR13.68 crores in FY14 (provisional
results) as against PAT of INR0.34 crores on OI of INR13.25 crores
in FY13.
ERNAD CONSTRUCTIONS: CRISIL Reaffirms 'B-' Rating on INR55MM Loan
-----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Ernad Constructions
Company Pvt Ltd continue to reflect its below-average financial
risk profile, marked by small net worth and below-average debt
protection metrics along with large working capital requirements,
commensurate with its inventory and stretched receivables.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 25 CRISIL A4 (Reaffirmed)
Cash Credit 55 CRISIL B-/Stable (Reaffirmed)
The ratings also factor in the company's small scale of
operations, susceptibility to intense competition in the civil
construction segment, and geographical concentration in the
revenue profile. These rating weaknesses are partially offset by
the extensive industry experience of the promoters and a moderate
order book.
Outlook: Stable
CRISIL believes that Ernad will continue to benefit over the
medium term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the company significantly
scales up its operations and maintains its profitability, thereby
leading to better-than-expected cash accruals and improved
liquidity. Conversely, the outlook may be revised to 'Negative' if
Ernad's financial risk profile and liquidity deteriorate, most
likely because of larger-than-expected with sizeable working
capital requirements, delays in project execution, low cash
accruals, or large debt-funded capital expenditure (capex).
Update
Ernad's revenue of INR69 million in 2013-14 (refers to financial
year, April 1 to March 31) registered healthy growth of around 40
per cent, supported by its moderate order book. The company also
maintained its comfortable operating margin of over 25 per cent
over the past two years. Ernad benefits from healthy revenue
visibility over the medium term, with an order book of INR214
million. CRISIL believes that the company will maintain stable
revenue and operating margin over the medium term, backed by its
moderate order book.
Ernad's financial risk profile is marked by a small net worth of
INR47.8 million as on March 31, 2014, despite the promoters'
equity infusion of INR20 million during 2013-14. The company has
average debt protection metrics, with a net cash accruals to total
debt (NCATD) ratio of around 10 per cent and interest coverage
ratio of 2.25 times for 2013-14. The financial risk profile is
marginally supported by moderate gearing of 1.59 times as on March
31, 2014. CRISIL expects Ernad's financial risk profile to be
constrained by its small net worth over the medium term.
Ernad has large working capital requirements, with inventory
estimated at 430 days and debtors at 125 days as on March 31,
2014. The company's liquidity remains stretched, with modest cash
accruals, working-capital-intensive operations, and almost full
bank limit utilisation. CRISIL believes that Ernad's liquidity
will remain stretched over the medium term, because of its modest
accruals and working-capital-intensive operations.
Ernad was established as a proprietorship firm in 1982 by Mr. M K
Ali, and reconstituted as a private limited company in August
2004. The founder and his family manage the company's daily
operations. Ernad is a civil contractor and undertakes civil
construction work (landscaping, and construction of buildings and
roads) primarily in Kerala.
GANPATI MEGA: CRISIL Raises Rating on INR40MM Loans to 'B+'
-----------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Ganpati Mega Builders (I) Private Limited to 'CRISIL B+/Stable',
from 'CRISIL B-/Stable', while reaffirming its rating on the
company's short-term facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 45 CRISIL A4 (Reaffirmed)
Cash Credit 35 CRISIL B+/Stable (Upgraded
from 'CRISIL B-/Stable')
Term Loan 5 CRISIL B+/Stable (Upgraded
from 'CRISIL B-/Stable')
The rating upgrade reflects the substantial increase in GMB's
revenue in 2013-14 (refers to financial year, April 1 to
March 31) on account of larger orders executed; the company is
expected to maintain its increased scale of operations over the
medium term, backed by its healthy order book. Its revenue
increased to INR215.8 million in 2013-14 from INR37.2 million in
2012-13. Furthermore, its healthy current order book of INR752
million provides revenue visibility over the medium term. GMB's
debt protection metrics have also improved, with interest
coverage and net cash accruals to total debt (NCATD) ratios at 2.7
times and 13 per cent, respectively, in 2013-14, against 1.2 times
and 3 per cent, respectively, in 2012-13. Debt protection metrics
are expected to improve further over the medium term, backed by
increasing scale of operations and a stable operating margin.
The ratings reflect the extensive experience of GMB's promoters in
the civil construction industry, and the revenue visibility
provided by its healthy order book. These rating strengths are
partially offset by the company's weak financial risk profile,
marked by low networth and below average gearing.
Outlook: Stable
CRISIL believes that GMB will continue to benefit over the medium
term from its promoters' extensive industry experience and healthy
order book. The outlook may be revised to 'Positive' if the
company's working capital cycle improves while it sustains its
scale of operations and operating margin, leading to improvement
in its financial risk profile, particularly its liquidity.
Conversely, the outlook may be revised to 'Negative' if GMB's
operating profitability declines materially, or there is a
slowdown in its revenue growth or further stretch in its working
capital cycle, leading to deterioration in its financial risk
profile.
GMB, incorporated in 2007, is engaged in civil construction and
undertakes projects for government authorities. The company is
based in Agra (Uttar Pradesh). It is managed by Mr. Piyush Jain
and Mr. Parag Jain. It bids for government projects and has
undertaken projects in redevelopment of buildings, construction of
housing for the poor, and canal construction.
HARSHNA FRUITS: CRISIL Reaffirms 'B-' Rating on INR50MM Loan
------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Harshna Fruits
(HF; part of the Harshna group) continues to reflect the Harshna
group's weak liquidity, marked by significant loans and advances
extended to affiliate concerns; low cash accruals, high bank limit
utilisation, and weak financial risk profile. The rating also
factors in the group's modest scale of operations in an intensely
competitive industry. These rating weaknesses are partially offset
by the extensive industry experience of the Harshna group's
promoters and the benefits that the group is expected to derive
from operational synergies and support that the entities will
derive from each other.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 50 CRISIL B-/Stable (Reaffirmed)
Bank Loan Facility
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of HF, Bhola Nath Naresh Kumar (BNNK),
Harshna Ice & Cold Storage (HICS), and Bhola Nath Rakesh Kumar
(BNRK). This is because these entities, collectively referred to
as the Harshna group, are in the same line of business, have close
intra-group operational and financial linkages, including fungible
cash flows, and are under a common management.
Earlier, for arriving at its rating, CRISIL had combined the
business and financial risk profiles of HF, BNNK, HICS, BNRK, and
Harshna Naturals (HN). The change in analytical approach is due to
change in business linkages and less operational synergies of HN
with the Harshna group. This is also due to the different
ownership structure of HN as compared to other entities of the
group.
Outlook: Stable
CRISIL believes that the Harshna group will benefit from the
extensive experience of its promoters as commission agents in the
cold storage industry and from demand for cold storage services in
the domestic market. However, the group's liquidity will be
constrained in the near term by large incremental working capital
requirement and funding support to affiliate concerns. The outlook
may be revised to 'Positive' if the group increases its scale of
operations and improves its profitability, leading to larger-than-
expected cash accruals and improved liquidity. Conversely, the
outlook may be revised to 'Negative' if the group's receivables
increase significantly, leading to further deterioration in
liquidity or if its sales or profitability declines.
Update
The Harshna group is estimated to report an operating income of
around INR361 million in 2013-14 (refers to financial year,
April 1 to March 31) vis-a-vis INR252 million in 2012-13. The
revenue growth is driven primarily by growth in HF due to
penetration of retail stores, resulting in increase in demand. The
growth is also supported by addition of new customers and
established relations with suppliers and customers. The group's
operating margin is estimated to be healthy at around 12.5 per
cent owing to synergies that the group derives from its integrated
nature of operations. The profitability is expected to remain at a
similar level over the medium term; but the same will also remain
exposed to fluctuation in fruit prices.
The Harshna group's liquidity remains weak marked by near full
utilisation of bank lines in 2013-14. The liquidity is also
constrained by low net cash accruals expected to be in the range
of INR20 million to INR25 million over the medium term against
repayment obligations of around INR19.5 million. Loans and
advances extended by the group to affiliate concerns estimated at
INR56 million as on March 31, 2014, further constrains the
liquidity. The financial risk profile is expected to remain weak
with gearing expected at around 3.5 times and interest coverage
ratio at around 1.6 times, over the medium term. This is due to
small net worth, net cash accruals, and large incremental working
capital requirements. The group's working capital requirements are
expected to remain stretched owing to large debtors estimated at
97 days as on March 31, 2014, primarily due to long realisation
period in HICS. The working capital requirements are expected to
remain large over the medium term due to large debtors and
increase in scale of operations.
The Harshna group was established in 1993 by Mr. Rakesh Bhola Nath
Kohli and Mr. Naresh Bhola Nath Kohli, when they established BNRK
and BNNK. Both the firms are commission agents for trading in
apples in Delhi's Azadpur mandi. In 1999, the group decided to
establish its own cold storage facility in Sonipat (Haryana), for
which it established HICS in the same year. HICS currently has a
multi-product cold-storage facility, with capacity of 11500
tonnes, along with ripening chambers. In 2004, the group set up
HF, which supplies fruits to retail stores.
The Harshna group's profit after tax (PAT) and operating income
are estimated at INR8 million andINR361 million, respectively, for
2013-14; it reported a PAT of INR8.5 million on operating income
of INR252 million for 2012-13.
MARK INFRASTRUCTURE: CRISIL Rates INR45MM Cash Credit at 'B+'
-------------------------------------------------------------
CRISIL's has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Mark Infrastructure Pvt Ltd (MIPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 50 CRISIL A4
Cash Credit 45 CRISIL B+/Stable
The ratings reflect MIPL's weak financial risk profile marked by
high gearing and small net worth, its modest scale of operations,
and susceptibility to intense competition in the civil
construction industry. These rating weaknesses are partially
offset by the extensive experience of MIPL's promoters in the
civil construction industry.
Outlook: Stable
CRISIL believes that MIPL will continue to benefit over the medium
term from its promoters' extensive experience in the civil
construction sector. The outlook may be revised to 'Positive' if
the company diversifies and sustainably improves its scale of
operations and profitability, thereby enhancing its financial risk
profile. Conversely, the outlook may be revised to 'Negative' if
MIPL's financial risk profile weakens because of reduced revenue
and margins, or if the company undertakes a large debt-funded
capital expenditure programme, or in case of delays in payments by
its principal contractors.
Set up in 1998 by Mr. Vemuri Ravi Kiran, MIPL undertakes civil
construction works related to construction of buildings. The
company is based in Hyderabad.
MIPL reported a profit after tax (PAT) of INR7 million on net
sales of INR289 million for 2012-13 (refers to financial year,
April 1 to March 31), vis-a-vis a PAT of INR6 million on net sales
of INR171 million for 2011-12.
MAYA EXPORTS: CRISIL Assigns 'B-' Rating to INR130MM Bank Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable' rating to the proposed
long-term bank facilities of Maya Exports.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 130 CRISIL B-/Stable
Bank Loan Facility
The rating reflects MEX's susceptibility to funding and
implementation risks for its on-going project and its
susceptibility to fluctuations in raw material prices, to
unfavourable monsoons and to central government policies. These
rating weaknesses are partially offset by the extensive experience
of MEX's partners in the rice industry, and MEX's proximity to
sources of paddy.
Outlook: Stable
CRISIL believes that MEX will continue to benefit over the medium
term from its partner family's extensive industry experience. The
outlook may be revised to 'Positive' if MEX executes its project
within the budgeted cost and time, and reports higher-than-
expected cash accruals. Conversely, the outlook may be revised to
'Negative' in case of time or cost overrun in the firm's project,
which will adversely impact its financial risk profile,
particularly its debt-servicing ability.
MEX was established in 2014 by Mrs Renu Singla and Mrs Rashmi
Singla. The firm is setting up a rice milling unit at Sangrur
(Punjab). It is expected to commence operations by
September 2014.
MILANO IMPEX: CRISIL Assigns 'B+' Rating to INR40MM Cash Credit
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Milano Impex Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 40 CRISIL B+/Stable
Inland/Import Letter
of Credit 15 CRISIL A4
The ratings reflect the company's small scale of operations in the
highly competitive footwear industry, along with its large working
capital requirements. The ratings also factor in MIPL's below-
average financial risk profile, marked by a modest net worth, high
total outside liabilities to tangible net worth (TOLTNW) ratio,
and subdued debt protection metrics. These ratings weaknesses are
partially offset by the promoter's extensive industry experience
and relationship with its principal, Egle Collection (EC), Russia.
Outlook: Stable
CRISIL believes that MIPL will continue to benefit from its
promoter's extensive industry experience and relationship with its
principal, EC over the medium term. The outlook may be revised to
'Positive' if the company's financial risk profile improves
significantly most likely because of a substantial increase in its
cash accruals or equity infusion. Conversely, the outlook may be
revised to 'Negative' if MIPL reports lower-than-expected cash
accruals, or if its working capital cycle weakens further, leading
to further deterioration in its financial risk profile.
MIPL was set up in Delhi in 2006 by Mr. Alok Rai, Mr. Vivek Rai
and Mr. Prem Raj Sharma. The company is the sole authorised
distributor for EC's entire footwear range in India.
MITTAL OCEAN: CRISIL Assigns 'B' Rating to INR65MM Loans
--------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/ CRISIL A4' ratings to
the bank facilities of Mittal Ocean Trade Pvt Ltd (MOTPL; part of
the Mittal group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 50 CRISIL B/Stable
Cash Credit 15 CRISIL B/Stable
Letter of Credit 60 CRISIL A4
The ratings reflect the Mittal group's weak financial risk profile
marked by high total outside liabilities to tangible net worth
(TOLTNW) ratio and weak debt protection metrics. The ratings also
factor in the group's modest scale of operations in the intensely
competitive timber industry leading to low profitability, and its
susceptibility to changes in regulations regarding timber import.
These rating weaknesses are partially offset by its promoters'
extensive experience in the timber business and their financial
support, and its moderate working capital requirements.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of MOTPL and Mittal Timber Store (MTS).
This is because both the entities, together referred to as the
Mittal group, are controlled by the same family and are engaged in
the same business.
Outlook: Stable
CRISIL believes that the Mittal group's business risk profile will
continue to benefit from its long-standing presence in the timber
industry. The group's financial risk profile will remain
constrained over the medium term, marked by high TOLTNW ratio and
weak debt protection measures. The outlook may be revised to
'Positive' in case of improvement in operating profitability
leading to higher accruals and increase in net worth. Conversely,
the outlook may be revised to 'Negative' in case of significant
increase in working capital requirements or large debt-funded
capital expenditure, leading to deterioration in the group's
financial risk profile.
Incorporated in 1999, MOTPL trades in timber and processes timber
logs from softwood and hardwood. The company has a timber
processing plant in Kandla (Gujarat). It is promoted and managed
by Mr. Rajiv Mittal and Mr. Vijay Mittal.
MTS was set up in 1975 as a proprietorship firm. It also trades in
timber and processes timber logs from softwood and hardwood at its
timber processing plant in Kandla. It is promoted by Mr. Krishna
Mittal.
MOTPL reported a profit after tax (PAT) of INR0.6 million on net
sales of INR279.1 million for 2012-13 (refers to financial year,
April 1 to March 31), against a PAT of INR0.3 million on net sales
of INR174.7 million for 2011-12. The company is likely to report
net sales of INR 394.0 million for 2013-14.
PUNJAB KESARI: CRISIL Reaffirms 'B' Rating on INR105MM Loans
------------------------------------------------------------
CRISIL's rating on the bank facilities of Punjab Kesari Publishers
Pvt Ltd continues to reflect PKP's modest scale of operations and
average financial risk profile marked by modest net worth. These
rating weaknesses are partially offset by assured inflow of orders
from Hind Samachar Ltd and limited exposure to project
implementation risk.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 57 CRISIL B/Stable (Reaffirmed)
Bank Loan Facility
Proposed Term Loan 48 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that PKP will continue to benefit from the assured
inflow of orders from HSL. The outlook may be revised to
'Positive' if PKP's financial risk profile improves significantly,
driven by improved cash accruals, equity infusion, and completion
of project without time and cost overruns. Conversely, the outlook
may be revised to 'Negative' if PKP's financial risk profile,
particularly liquidity, is constrained by low cash accruals or
time or cost overruns in its project or larger-than-expected debt-
funded capital expenditure (capex).
Update
PKP registered revenue of INR21 million for 2012-13 (refers to
financial year, April 1 to March 31). The trading segment
accounted for about 38 per cent of revenue. Up to December 2013 in
2013-14, PKP registered revenue of INR10 million; its revenue for
the year is estimated at around INR15 million. PKP reported
operating margin of 27.4 per cent for 2012-13; and is estimated to
have stable profitability in 2013-14. The margin is expected to
improve on account of commencement of colour printing operations.
PKP is likely to install colour printing machines in 2014-15. The
project cost of about INR60 million will be funded in a debt-to-
equity ratio of 3:1.
PKP's net worth remains modest, at INR32 million as on March 31,
2014. With modest accretion to reserves, the net worth is expected
to remain below INR50 million over the medium term. However, with
repayment of unsecured loans, the company's gearing declined to
1.3 times as on March 31, 2013, and is estimated to have declined
to 0.5 times as on March 31, 2014. However, with proposed debt-
funded capex, the gearing is expected to increase over the medium
term.
PKP's interest coverage is average, at 2.3 times in 2012-13; it is
estimated to have improved to be around 4 times on account of
lower finance costs in 2013-14. The net cash accruals to total
debt ratio is estimated to have improved to about 27 per cent in
2013-14 from 8 per cent in 2012-13. CRISIL believes that PKP's
debt protection metrics will remain average over the medium term
because of increased finance costs on account of proposed large
debt-funded capex.
PKP's liquidity is supported by large unencumbered cash balance of
INR28 million as on March 31, 2013, and unsecured loans from
promoters. However, proposed large debt-funded capex will
constrain the company's liquidity over the medium term.
PKP prints a portion of Punjab Kesari, a Hindi newspaper based in
North India and owned by PKP's promoters; PKP's printing
facilities are in Delhi and Jaipur (Rajasthan). PKP also procures
inks, chemicals, and oils, for supply to HSL. PKP was incorporated
in 2004 by Mr. Ashwini Kumar and his family members and commenced
printing operations in February 2012.
PURAN CHAND: CARE Assigns 'B' Rating to INR33cr Bank Loan
---------------------------------------------------------
CARE assigns 'CARE B/ CARE A4' ratings to bank facilities of
Puran Chand Rice Mills Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 33 CARE B Assigned
Short term Bank Facilities 2 CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities of Puran Chand Rice
Mills Private Limited are primarily constrained by its weak
financial risk profile characterized by low profitability margins,
highly leveraged capital structure, weak coverage indicators and
working capital intensive nature of operations. The ratings are
further constrained on account of its susceptibility to
fluctuation in the raw material prices and currency rates. The
ratings also factor in PCRM's presence in the highly fragmented
agro processing industry characterized by a high level of
government regulation.
The ratings, however, derives strength from its experienced
promoters, growing scale of operations and close proximity
of its manufacturing facilities to raw material sources leading to
competitive advantage.
Going forward, the ability of the company to improve its
profitability margins and capital structure along with effective
working capital management shall be the key rating sensitivities.
Karnal-based (Haryana) Puran Chand Rice Mills Private Limited was
incorporated in 1989 as a partnership concern by Mr Naveen Gupta
and Ms Suman Gupta (wife of Mr Naveen Gupta). Later in 2009, it
was converted into a private limited company. PCRM is engaged in
milling, processing and trading of rice from its unit located at
Taraori, district Karnal (Haryana) with an installed capacity of
25,000 TPA as on March 31, 2014. During FY14 (provisional; refers
to the period April 1 to March 31), the company generated 97% of
its total operating income from the trading business.
The company procures the key raw material, ie, paddy from Haryana
and Uttar Pradesh. PCRM primarily exports its products to the
Middle East countries such as Saudi Arabia and Yemen. It sells the
product under the brand name "Rabia".
As per the provisional results for FY14, PCRM reported a total
operating income of INR163.06 crore (INR86.31 crore in
FY13) and a PAT of INR0.15 crore (INR0.08 crore in FY13).
RADHIKA COTEX: CRISIL Assigns 'B' Rating to INR80MM Loans
---------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the bank
facilities of Radhika Cotex.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 11.2 CRISIL B/Stable
Cash Credit 45 CRISIL B/Stable
Proposed Long Term
Bank Loan Facility 23.8 CRISIL B/Stable -
The rating reflects susceptibility of Radhika Cotex's operations
to changes in government regulations and its working capital
intensive operations and it's below average financial risk profile
marked by its leveraged capital structure. These rating weaknesses
are partially offset by the benefits Radhika Cotex is expected to
derive from extensive experience of its promoters in the cotton
ginning business.
Outlook: Stable
CRISIL believes that Radhika Cotex will continue to benefit over
the medium term from its promoters' extensive experience in the
cotton ginning business. The outlook may be revised to 'Positive'
if the company's revenues and profitability increase substantially
or in case of significant infusion of capital resulting in an
improvement in Radhika Cotex's capital structure leading to an
improvement in its financial risk profile. Conversely, the outlook
may be revised to 'Negative' if the firm's revenues and
profitability decline substantially or if the firm undertakes a
'larger than expected' debt-funded expansion, or if the partners
withdraw significant capital from the firm leading to
deterioration in its financial risk profile.
Set up in the year 2005, Radhika Cotex is a partnership firm
engaged in ginning and pressing of raw cotton and sells cotton
lint and cotton seeds based out of Amreli, Gujrat. The partners in
the firm are Mr Ramesh Vadera and Mr Sharad Vadera.
For 2012-13 (refers to financial year, April 1 to March 31),
Radhika Cotex reported a profit after tax (PAT) of INR0.85 million
on net sales of INR160.9 million.
RUKMINIRAMA STEEL: CARE Assigns 'D' Rating to INR37.84cr Loans
--------------------------------------------------------------
CARE assigns 'CARE D' rating to the bank facilities of Rukminirama
Steel Rolling Pvt Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 22 CARE D Reaffirmed
(Fund-based)
Long-term Bank Facilities 14.34 CARE D Assigned
(Term Loan)
Short-term Bank Facilities 23.50 CARE D Assigned
(Non-fund Based)
Rating Rationale
The rating assigned to the bank facilities of Rukminirama Steel
Rolling Pvt Ltd factor in the ongoing delay in debt servicing due
to the constrained liquidity position.
Established in 1998, RSRPL is engaged in the manufacturing of mild
steel ingots and rolled products such as TMT bars, squares, angles
and channels. The company has an installed capacity of 45,000 MTPA
for ingots and 96,000 MTPA for rolled products. The manufacturing
facility is located at Cuncolim, Goa. In April 2011, RSRPL
commissioned an iron ore pelletisation plant at Hospet (Karnataka)
with a installed capacity of 300,000 ton per annum.
RSRPL reported a loss of INR4.49 crore on the total income of
INR280.60 crore in FY13 (refers to the period April 1 to
March 31) as against a profit after tax of INR1.21 crore on the
total income of INR279.71 crore in FY12.
SAGAR AGENCIES: CRISIL Cuts Rating on INR70MM Loans to 'B'
----------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank loan
facility of Sagar Agencies to 'CRISIL B/Stable' from 'CRISIL
B+/Stable'. The rating on the firm's short-term facility has been
reaffirmed at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 35 CRISIL A4 (Reaffirmed)
Cash Credit 40 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
Term Loan 30 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
The rating downgrade reflects weakening of SA's liquidity profile
on account of pressure in its existing operations thereby
impacting its profitability leading to insufficient cash accruals
to meet its debt obligations. However the liquidity will be
supported by the RDs the firm has and continuous support from its
promoters in the form of unsecured loans. The rating downgrade
also reflects deterioration in its business risk profile marked by
intensely competitive polymer market.
The rating reflects SA' below average financial risk profile,
marked by small networth, high TOLTNW and weak debt protection
metrics. These rating weaknesses are partially offset by the
extensive experience of SA's promoters in trading of polymer and
pipe-fittings.
Outlook: Stable
CRISIL believes that SA will continue to benefit over the medium
term from the industry experience of its promoters. The outlook
may be revised to 'Positive' in case of sustained increase in its
revenues and profitability leading to an improvement in its
financial risk profile. Conversely, the outlook may be revised to
'Negative' in case of further deterioration in its financial risk
profile on account of lower than expected cash accruals or debt
funded capital expenditure.
Established in 1990, Sagar Agencies (SA) is involved in the
trading of poly urethane and poly vinyl chloride resins, and pipe
fittings. The day to day operations of the company is managed by
Mr. P P Sathyapalan.
SBC MINERALS: CRISIL Assigns 'B+' Rating to INR150MM Loans
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of SBC Minerals Pvt Ltd (SBC).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 50 CRISIL B+/Stable
The rating reflects SBC's weak financial risk profile, marked by a
leveraged capital structure, and its modest scale of operation in
the fragmented coal trading industry. These weaknesses are
partially offset by the industry experience of the company's
promoters and its reputed client base.
Outlook: Stable
CRISIL believes that SBC will benefit from the healthy demand for
coal and its established customer relationships. The outlook may
be revised to 'Positive' if the company reports higher-than-
expected growth in revenue and earnings, resulting in improvement
in its capital structure. Conversely, the outlook may be revised
to 'Negative' if SBC's financial risk profile deteriorates, most
likely because of substantially lower-than-expected profitability
or revenue, or significant deterioration in its working capital
cycle.
Incorporated in 2004, SBC is owned and managed by Mr. Ravindra
Aggarwal. The company trades in non-coking coal and also
supervises the loading and unloading of goods for which it charges
a liaison fee. It has its corporate office at Delhi.
SERA EXPORTS: CRISIL Reaffirms 'B' Rating on INR60MM Loans
----------------------------------------------------------
CRISIL rating continues to reflect Sera Exports (Sera) average
financial risk profile, marked by average debt protection metrics,
working-capital-intensive operations, customer concentration in
its revenue profile, and its susceptibility to intense industry
competition. These rating weaknesses are partially offset by the
extensive experience of the firm's partners in the architectural
hardware industry and its established customer relationships.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Export Packing Credit 30 CRISIL B/Stable (Reaffirmed)
Foreign Bill Purchase 30 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that Sera will continue to benefit over the medium
term from its partners' extensive industry experience and its
established relationships with customers. The outlook may be
revised to 'Positive' if the firm increases its scale of
operations while improving its financial risk profile. Conversely,
the outlook may be revised to 'Negative' if Sera's revenue
declines, or if its financial risk profile deteriorates, most
likely due to a stretch in its working capital cycle or large
additional debt-funded capital expenditure.
Update
Sera's net sales are estimated to be in the range of INR80 million
to INR85 million for 2013-14 (refers to financial year, April 1 to
March 31) as against INR43 million reported for 2012-13. The
increase was driven by the addition of new products and customers,
coupled with higher demand from its existing customers. The firm's
operating margin increased by around 270 basis points in 2013-14
to an estimated 11 per cent. The increase in margin was driven by
the customised nature of its new products, which fetch better
margins.
Sera's operations are highly working capital intensive as
reflected in its estimated gross current asset (GCA) of around 450
days as on March 31, 2014. The GCA days are driven by large
inventory, estimated at 200 to 220 days, and a long receivables
cycle of 230 to 250 days. The firm's average bank limit
utilisation was around 78 per cent during the 12 months ended
March 31, 2014.
Sera's net worth is estimated to have remained small at INR44
million to INR48 million as on March 31, 2014. The firm has
moderate debt towards funding its working capital requirements;
this, coupled with the small net worth, is estimated to have
resulted in moderate gearing of 1.7 to 1.8 times as on March 31,
2014.
Sera, established in 1999, is owned and managed by Mr. Sachdeva
and his family. The firm manufactures architectural hardware,
which includes door fittings and window fittings at its facility
in Aligarh (Uttar Pradesh).
SHAMSHREE LIFESCIENCES: CRISIL Reaffirms B+ INR226.3M Loan Rating
-----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Shamshree Lifesciences
Ltd continue to reflect SLL's below-average financial risk
profile, marked by a modest net worth, high gearing, and average
debt protection metrics; the ratings also factor in the company's
increasing though modest scale of operations. These rating
weaknesses are partially offset by the extensive experience of
SLL's promoters in the pharmaceutical industry and funding support
to the company.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 62.5 CRISIL B+/Stable (Reaffirmed)
Letter of Credit 10 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 52.6 CRISIL B+/Stable (Reaffirmed)
Term Loan 111.2 CRISIL B+/Stable (Reaffirmed)
CRISIL had re-affirmed its ratings on SLL's bank facilities to
'CRISIL B+/Stable/CRISIL A4' vide its rating rationale dated
May 8, 2014.
Outlook: Stable
CRISIL believes that SLL's credit profile will remain constrained
over the near to medium term on account of increased debt
obligation and its modest accruals constrained by its scale of
operations. SLL however will continue to benefit from its
promoters' extensive industry experience. The outlook may be
revised to 'Positive' if there is significant improvement in the
company's scale of operations while it maintains its
profitability, leading to better than expected accruals.
Conversely, the outlook may be revised to 'Negative' if SLL's
financial risk profile declines, most likely because of
considerably low profitability, substantially large working
capital requirements, or any major debt-funded capital
expenditure, resulting in substantial debt in its capital
structure.
SLL, based in Baddi (Himachal Pradesh), was established in 2006 by
Mr. Jatinder Jain as a closely held public limited company;
however, it commenced operations only from December 2010. SIL
manufactures dry powder injectables, mainly antibiotics.
SHIVAM CORP: CRISIL Reaffirms 'B-' Rating on INR200MM Loan
----------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Shivam
Corporation (India) continues to reflect Shivam's weak financial
risk profile, marked by low profitability, a highly leveraged
capital structure, weak debt protection metrics, and a small net
worth, and its small scale of operations. These rating weaknesses
are partially offset by the experience of the firm's promoters in
the metal trading industry, and its long track record of
operations.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 200 CRISIL B-/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that Shivam will continue to benefit over the
medium term from the extensive industry experience of its
promoters. The outlook may be revised to 'Positive' in case of
substantial improvement in Shivam's working capital management,
leading to better liquidity. Conversely, the outlook may be
revised to 'Negative' if the firm contracts large debt to fund
capital expenditure, or its working capital management
deteriorates, leading to further weakening of its liquidity.
Update:
Shivam's revenue registered a marginal growth of 4 per cent year-
on-year to around INR10.7 million in 2013-14 (refers to financial
year, April 1 to March 31); this was primarily on account of
subdued demand. The firm's operating margin has remained low, at
3.5 to 4.0 per cent over the past three years, due to the trading
nature of its business.
Shivam's operations are working capital intensive as reflected in
its estimated gross current assets (GCAs) of around 160 days as on
March 31, 2014. The GCA days have been at similar levels in the
past, driven by its long receivables cycle of around 150 days. The
firm's average bank limit utilisation has been moderate at around
63 per cent during the 12 months ended March 31, 2014
Shivam's net worth was low at around INR77 million as on
March 31, 2014. The firm has large debt for funding its working
capital requirements; this, coupled with a small net worth has
resulted in a high total outside liabilities to tangible net worth
ratio of around 5.15 times as on March 31, 2014.
Shivam trades in pig iron, cast iron, and iron scrap. The firm is
the sole authorised agent for JNI for purchasing pig iron in Delhi
and Haryana. It has also obtained the dealership of SIL in Delhi
and Haryana in 2012-13. Shivam has its own warehouses at Faridabad
(Haryana), Ghaziabad (Uttar Pradesh), Samalkha (Haryana), and
Delhi, and has about 100 customers.
SINGLA TIMBERS: CRISIL Ups Rating on INR95MM Loans to 'B+'
----------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Singla Timbers Pvt Ltd to 'CRISIL B+/Stable' from 'CRISIL
B/Stable', while reaffirming the rating on the company's short-
term bank facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 45 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Foreign Letter of
Credit 275 CRISIL A4 (Reaffirmed)
Proposed Long Term 50 CRISIL B+/Stable (Upgraded
Bank Loan Facility from 'CRISIL B/Stable')
The rating upgrade reflects STPL's better-than-expected financial
risk profile marked by moderate total outside liabilities to
tangible net worth (TOLTNW) ratio of 2.4 times as on March 31,
2014, significantly lower than CRISIL's expectations, as against
TOLTNW ratio of 4.33 times as on March 31, 2013. This was on
account of significant equity infusion from promoters of INR17.9
million (including conversion of INR14.3 million of unsecured
loans from promoters into equity) in 2013-14 (refers to financial
year, April 1 to March 31). The debt protection metrics were in
line with CRISIL's expectations. CRISIL believes that the
financial risk profile will remain stable over the medium term in
absence of any debt funded capital expenditure (capex) plans.
The company's scale of operations remained flat in 2013-14 with
net sales of INR846.6 million compared with net sales INR844.5
million in 2012-13, due to slowdown in the construction industry.
CRISIL believes that the net sales will remain in the range of
INR900-950 million over the medium term due to weak demand in the
end user industry.
The rating reflects STPL's low profitability, susceptibility to
adverse foreign exchange (forex) fluctuations and to volatility in
timber prices. These ratings weaknesses are partially offset by
STPL's average financial risk profile marked by moderate TOLTNW
and modest debt protection metrics and the extensive experience of
STPL's promoters in the timber industry.
Outlook: Stable
CRISIL believes that STPL will continue to benefit over the medium
term from the extensive experience of its promoters in the timber
industry and its moderate capital structure over the medium term.
The outlook may be revised to 'Positive' if the company reports
significantly higher-than-expected cash accruals most likely due
to higher profitability, while maintaining its working capital
management. Conversely, the outlook may be revised to 'Negative'
if the company reports significantly lower-than-expected cash
accruals or if it undertakes a large debt-funded capex, leading to
deterioration of its financial risk profile.
STPL, set up in 2009, is promoted by Mr Rajeev Kumar and Mr Arpit
Gupta. The company took over the operations of the partnership
firm 'Singla Timbers', which was set up in 1993. STPL imports and
trades timber and logs and is based in Rajpura (Punjab).
STPL reported net sales of INR846.6 million, on a provisional
basis, for 2013-14. STPL reported profit-after-tax (PAT) of INR0.9
million on net sales of INR844.5 million for 2012-13, as against
PAT of INR1.7 million on net sales of INR684.6 million for 2011-
12.
SKA INFRASTRUCTURE: ICRA Cuts Rating on INR16.95cr Loans to 'D'
---------------------------------------------------------------
ICRA has revised the long-term rating assigned earlier to the
INR9.25 crore, fund-based bank facilities and INR0.70 crore, term-
loan programme of SKA Infrastructure Private Limited to [ICRA]D
from [ICRA]BB- with a stable outlook earlier. Further, ICRA has
also revised the short-term rating assigned earlier to the INR7
crore, non-fund based bank facilities of SKAIPL to [ICRA]D from
[ICRA]A4 earlier.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based bank 9.25 [ICRA]D; downgraded
facilities: Cash
Credit
Fund-based bank 0.70 [ICRA]D; downgraded
facilities: Term
Loans
Non-fund based 7.00 [ICRA]D; downgraded
facilities: Bank
Guarantee
The revision in SKAIPL's ratings factor in the irregularity
observed in company's cash credit account as reflected in
consistent overutilization of the sanctioned limits, owing to
stretched liquidity position primarily caused by receivable issues
in its construction business. Despite a decline in revenues during
FY14, the company's working capital requirements increased (as
reflected in NWC/OI increasing from 28% in FY13 to 35% in FY14)
driven by high level of receivables. Owing to receivable issues,
the company also experienced a significant slowdown in pace of
execution of its ongoing contracts which together with no
incremental additions to its order book in the past two years
translated into a decline in its revenues during FY14. Given that
no new orders have been secured during FY14, this also results in
limited revenue visibility.
Besides, the company also experienced a fall in its revenues from
the RMC division. The impact has particularly been accentuated by
the sectoral as well as geographical concentration of the
company's operations which resulted in increased vulnerability of
company's earnings to local developments. Further the ratings
continue to be constrained by the company's highly leveraged
capital structure owing to significant working capital
requirements of the business, its modest equity-capital base and
sizeable debt-funded capex for addition of construction equipments
undertaken by the company in the recent years. Increased working
capital intensity and sizeable debt repayment obligations together
with stagnancy in profits continued to result in weak coverage
indicators and cash flows for the company.
Although ICRA has taken a note of experience of SKAIPL's promoters
in the construction business in Punjab region; company's
demonstrated execution capabilities; and continued contribution of
RMC segment in the total turnover which renders some diversity to
company's earnings, these strengths are largely offset by the
above-mentioned concerns.
In ICRA's view, SKAIPL's ability to strengthen its liquidity
position by reducing receivable levels and strengthening its
capital structure will be the key rating sensitivities. Further,
the company's ability to diversify and strengthen its order-book
position so as to have better revenue-visibility; and maintain
healthy profitability margins, will also be the key rating
sensitivities.
Incorporated in March 2011 by Mr. Didar Singh and Mr. Gurinder
Singh (brothers), SKA Infrastructure Private Limited (SKAIPL) is a
closely-held company engaged in construction business. Prior to
2011, the business was being conducted under a partnership firm
SKA Builders since 2004.
SPENTO FLOOR: CRISIL Upgrades Rating on INR100MM Term Loan to B+
----------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Spento Floor Tiles Pvt Ltd to 'CRISIL B+/Stable' from 'CRISIL B-
/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 100 CRISIL B+/Stable (Upgraded
from 'CRISIL B-/Stable')
The upgrade in rating reflects CRISIL's belief that SFPL's
financial risk profile and liquidity will continue to improve over
the medium term backed by moderate growth in sales and sustained
profitability. The company has booked sales of INR240 million for
2013-14 (refers to financial year, April 1 to
March 31), a compound annual growth rate of 27 per cent over the
past two years, aided by stabilisation of operation. The company
has operated at moderate profitability of around 13 per cent,
which has led to higher than expected cash accruals of INR21.8
million for the year. It is expected to generate moderate cash
accruals of around INR30 million over the medium term, which is
expected to support its liquidity. The reliance on bank borrowings
is also expected to remain low with sufficient cash accruals to
support its working capital requirements.
The ratings reflect SFPL's large working capital requirements and
small scale of operations in the intensely competitive ceramic
tiles industry. These rating weaknesses are partially offset by
its promoters' extensive industry experience and the benefits that
the company derives from its favorable location.
Outlook: Stable
CRISIL believes SFPL will continue to benefit over the medium term
from its promoters' extensive experience in the ceramic tiles
industry. The outlook may be revised to 'Positive' in case of
significant improvement in the company's scale of operations while
it maintains its profitability, leading to higher-than-expected
cash accruals. Conversely, the outlook may be revised to
'Negative' if SFPL working capital requirements increase further
or it undertakes any debt-funded capital expenditure leading to
weak financial risk profile.
SFPL, established in 2011, was promoted by Mr. Pareshkumar
Detroja. The company manufactures porcelain floor tiles at its
plant in Morbi (Gujarat); it commenced production in April 2012.
SFPL reported a net profit of INR2.6 million on net sales of
INR240 million for 2013-14, vis-a-vis a net loss of INR10.4
million on net sales of INR155 million for 2012-13.
SRE DHANALAKSHMI: CRISIL Reaffirms 'B+' Rating on INR90MM Loans
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Sre Dhanalakshmi
Spinning Mills continue to reflect SDSM's moderate financial risk
profile marked by modest net worth, its modest scale of operations
in the fragmented cotton textile industry, and the susceptibility
of its operating profitability to volatility in raw material
prices. These rating weaknesses are partially offset by the
extensive industry experience of the firm's promoter in the cotton
textile industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Letter of Credit 10 CRISIL A4 (Reaffirmed)
Long Term Loan 6.5 CRISIL B+/Stable (Reaffirmed)
Open Cash Credit 50 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 33.5 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes SDSM will continue to benefit over the medium term
from its proprietor's extensive industry experience. The outlook
may be revised to 'Positive' in case of a sustained improvement in
the firm's scale of operations and operating profitability,
resulting in a better financial risk profile. Conversely, the
outlook may be revised to 'Negative' if SDSM's working capital
management deteriorates, or if it undertakes a larger-than-
expected debt-funded capital expenditure (capex) programme, or if
its proprietor withdraws capital from the firm, leading to
weakening of its financial risk profile.
Update
SDSM is estimated to report an operating income of INR249 million
for 2013-14 (refers to financial year, April 1 to March 31), on a
provisional basis, as against INR232 million reported for 2012-13.
Its operating margin remained moderate, at an estimated 5.5 per
cent, in 2013-14 against 5.9 per cent for 2012-13. During 2013-14,
the firm increased its capacities by around 25 per cent. Its
revenue is expected to grow at a healthy rate of over 15 per cent
per annum over the medium term aided by the improved utilisation
of its new capacities coupled with healthy demand. Its operating
margin is expected to remain moderate at 5 to 6 per cent over the
medium term with stable anticipated demand.
SDSM's financial risk profile is weak, marked by high gearing and
weak debt protection metrics. Its gearing is estimated at 1.79
times as on March 31, 2014. The firm's net cash accruals to total
debt and interest coverage ratios are estimated at 0.07 times and
1.55 times, respectively, for 2013-14. CRISIL believes that SDSM's
gearing and debt protection metrics will improve over the medium
term, with moderate accretion to reserves and the absence any of
debt-funded capex plans.
SDSM's liquidity is weak, marked by almost fully utilised bank
lines with frequent over-drawn limits; its average bank limit
utilisation was 103 per cent during the 12 months through April
2014. This was due to its working-capital-intensive operations.
The firm is expected to generate cash accruals of INR6 million
vis-a-vis repayment obligations of INR2 million per annum, over
the medium term. CRISIL believes that SDSM's liquidity will remain
weak over this period, on account of its working-capital-intensive
operations.
Established in 1998 as a proprietorship concern by Ms. K V
Dhanalakshmi, SDSM manufactures cotton yarn.
SREE AQUATICS: CRISIL Ups Rating on INR24cr Bank Loan to 'B'
------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Sree Aquatics to 'CRISIL B/Stable' from 'CRISIL B-/Stable'. The
rating on the firm's short-term facility has been reaffirmed at
'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 70 CRISIL A4 (Reaffirmed)
Proposed Long Term 24 CRISIL B/Stable (Upgraded
Bank Loan Facility from 'CRISIL B-/Stable')
The rating upgrade reflects CRISIL's belief that SRA will maintain
its improved liquidity over the medium, driven by steady cash
accruals (of around INR1.2 million annually) against nil maturing
debt, in the absence of debt-funded capital expenditure (capex)
programmes. The bank lines were utilised at a modest 13 per cent
during the 12 months through March 2014.
The ratings also reflect the firm's weak financial risk profile,
marked by low net worth, high gearing, and below-average debt
protection metrics. These rating weaknesses are partially offset
by the benefits that SRA derives from its extensive proprietor's
experience.
Outlook: Stable
CRISIL believes that SRA will continue to benefit over the medium
term from the industry experience of its proprietor. The outlook
may be revised to 'Positive' if capital infusions by the
proprietor, or better-than-expected revenue and profitability
strengthen the financial risk profile considerably. Conversely,
decline in profitability or revenue; stretch in working capital
cycle (resulting in low cash accruals); or weakening in financial
risk profile on account of a sizeable capex, are factors that
could drive a revision in outlook to 'Negative'.
SRA, a proprietorship firm, commenced operations in April 2011.
The firm trades in raw materials'such as soya and groundnut de-
oiled cake, and plain white refined flour'that are required to
make fish feed and prawn feed. SRA is managed by Mr. Srinivas
Reddy.
TARAWADE LOGISTICS: CRISIL Assigns 'B+' Rating to INR10MM Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Tarawade Logistics Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 50 CRISIL A4
Cash Credit 10 CRISIL B+/Stable
The ratings reflect TLPL's below-average financial risk profile
marked by modest net worth and average gearing, and its modest
scale of operations with high customer concentration in revenue.
These rating weaknesses are partially offset by the extensive
industry experience of TLPL's promoters and its established
relationship with customers.
Outlook: Stable
CRISIL believes that TLPL will continue to benefit over the medium
term from its promoters' extensive industry experience and its
established relationship with customers. The outlook may be
revised to 'Positive' in case of significantly better-than-
expected cash accruals or substantial equity infusion along with
efficient working capital management. Conversely, the outlook may
be revised to 'Negative' in case of weakening of liquidity,
because of low cash accruals or large working capital requirements
or any unanticipated financial exposure to group entities.
Established in 2009, TLPL is engaged in material handling and
transportation. The company is headquartered in Pune and is owned
and managed by Mr. P D Tarawade and his family. It was formed to
take over the business of proprietorship concern M/s PD Tarawade,
which was engaged in the same business.
TEHRI PULP: CARE Upgrades Rating on INR81.44cr Loans to 'C'
-----------------------------------------------------------
CARE assigns 'CARE C/CARE A4' ratings to the bank facilities of
Tehri Pulp & Paper Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 81.44 CARE C Revised from
CARE D
Short term Bank Facilities 15.75 CARE A4 Revised from
CARE D
Rating Rationale
The revision in the ratings of the bank facilities of Tehri Pulp &
Paper Limited take into account the regularization of debt
servicing and improvement in the financial risk profile in FY14
(Provisional refers to the period April 1 to March 31). The
ratings also take into consideration the long track record of
operations and experience of the promoters in the industry.
However, the ratings continue to be constrained by the working
capital intensive nature of operations, moderate leverage as on
March 31, 2014 and susceptibility of profitability to volatility
in the raw material prices.
Going forward, TPPL's ability to maintain healthy sales and
profitability along with efficient working capital management
would be the key rating sensitivities.
Tehri Pulp & Paper Limited, incorporated in year 1993, is engaged
in the manufacturing of Kraft Paper and Kraft Liner in
Muzaffarnagar, Uttar Pradesh. TPPL has waste paper and agro-based
kraft paper manufacturing facilities located at its
units in Muzaffarnagar, Uttar Pradesh with a total installed
capacity of 78,000 metric tonne per annum (MTPA) as on March 31,
2014.
TPPL is a part of the Bindal Group of companies, which includes
other companies like Neeraj Paper Marketing Ltd (CARE BB/ A4),
Agarwal Duplex Board Mills Ltd (CARE BB+/ A4+), Bindlas Duplex Ltd
(CARE BB+/ A4+) and Bindals Papers Mills Ltd (CARE C/A4).
In FY14 (Provisional), TPPL had reported a total income of
INR148.83 crore and PAT of INR3.60 crore as compared with
INR111.61 crore of total income and INR1.63 crore of PAT in FY13.
TRILOK CHAND: CRISIL Cuts Rating on INR115MM Loans to 'D'
---------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Trilok Chand Gupta & Co. (TCG) to 'CRISIL D/CRISIL D' from 'CRISIL
B-/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 75 CRISIL D (Downgraded
from 'CRISIL A4')
Cash Credit 40 CRISIL D (Downgraded
from 'CRISIL B-/Stable')
The rating downgrade reflects recent instances of overdrawing on
TCG's cash credit account, which lasted for more than 30 days
caused by the company's weak liquidity. Its weak liquidity is
driven by its highly working-capital-intensive operations and
delay in receiving payments from its debtors/clients.
The ratings continue to reflect TCG's working-capital-intensive
operations and weak financial flexibility, and the vulnerability
of the firm's margins to competitive pressures. However, the firm
continues to benefit from the extensive experience of the
promoters in the construction industry.
TCG was set up as a partnership firm in 1987 by Mr. Trilok Chand
Gupta and his family members in Haridwar (Uttarakhand). It is a
Class-A contractor that executes road construction projects. Mr.
Sudhir Kumar Gupta (son of Mr. Trilok Chand Gupta) was inducted
into the firm as a partner in 2006-07 (refers to financial year,
April 1 to March 31). TCG is currently managed by Mr. Sudhir Kumar
Gupta.
YASHAS FRP: CARE Assigns 'B+' Rating to INR3.68cr Bank Loan
-----------------------------------------------------------
CARE assigns 'CARE B+' and 'CARE A4' ratings to the bank
facilities of Yashas Frp Manufacturing Pvt Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 3.68 CARE B+ Assigned
Long/Short-term Bank
Facilities 4.50 CARE B+/CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities of Yashas FRP
Manufacturing Pvt Ltd are primarily constrained on account of its
modest scale of operations, low net-worth base, leveraged capital
structure and weak liquidity position.
Furthermore, the ratings are also constrained by its presence in a
highly competitive and fragmented industry. The ratings, however,
draw strength from the experience of the promoters and moderate
profitability.
The ability of YFM to increase its scale of operations, improve
profitability and capital structure along-with effective
working capital management will be the key rating sensitivities.
YFM is a closely held private limited company incorporated on
May 5, 2008 and started its operations from November 2008. YFM is
promoted by Mr Sanjay Gupta and Ms Shalini Gupta. YFM has its
manufacturing facilities located at Indore spread over 18,000 sq
ft having a capacity of 75 tonnes per month. YFM is engaged in the
business of manufacturing Fiber-glass Reinforced Plastic (FRP)
products such as fans & general moulding products, cable
management systems, custom structural profiles, hand-railings &
ladders, mass transportation interiors and exteriors.
During February 2014, YFM expanded its facilities by 45 tonnes per
month by acquiring machineries at a total cost of INR3.07 crore
funded by term loan of INR2.25 crore and promoter's contribution
of INR0.82 crore.
During FY13 (refers to the period April 1 to March 31), YFM
reported a total operating income (TOI) of INR9.05 crore and
PAT of INR0.47 crore as against a TOI of INR5.71 crore and PAT of
INR0.25 crore during FY12. Furthermore during FY14 (provisional),
YFM reported a TOI of INR6.92 crore and PAT of INR0.02 crore.
=========
J A P A N
=========
EAST STREET: Moody's Upgrades Rating on 2 Classes of Notes to Ba2
-----------------------------------------------------------------
Moody's Japan K.K. has upgraded the ratings on five classes of the
notes of the East Street Referenced Linked Notes series.
The affected ratings are as follows:
Deal Name: East Street Referenced Linked Notes 2002-1 series 1
JPY23.0 billion Class X1 Notes, Upgraded to Aa1 (sf); previously
on May 28, 2013 Upgraded to Aa2 (sf)
JPY10.0 billion Class A Notes, Upgraded to Ba2 (sf); previously
on May 28, 2013 Downgraded to B1 (sf)
Deal Name: East Street Referenced Linked Notes 2002-1 Series 2
JPY4.875 billion Class A Notes, Upgraded to Aa1 (sf); previously
on May 28, 2013 Upgraded to Aa3 (sf)
Deal Name: East Street Referenced Linked Note 2004-1
JPY18.75 billion Class X1 Notes, Upgraded to Aa1 (sf); previously
on May 28, 2013 Affirmed at A3 (sf)
JPY7.5 billion Class A Notes, Upgraded to Ba2 (sf); previously on
May 28, 2013 Downgraded to Caa2 (sf)
These transactions are synthetic structured finance collateralized
debt obligations (SF CDO), referencing ABS, RMBS, CMBS, and CDO
assets, more than 90% of which are Japanese assets.
Ratings Rationale
The ratings upgrade of the five classes reflects improved credit
quality of the referenced pool, mainly due to the redemption of
certain referenced assets.
This development has particularly affected the ratings of Class X1
and A in East Street Referenced Linked Note 2004-1. Certain B-
rated and Caa-rated assets, which made up approximately 2% of the
referenced pool, were fully redeemed. As such, Moody's upgraded
the rating of these classes by five and six notches respectively.
In all three series, as the number of the reference assets becomes
less, any redemption or rating change of the lowly-rated reference
assets will have a significant impact on the ratings on the rated
classes.
The principal methodology used in these ratings was "Moody's
Approach to Rating SF CDOs" published in March 2014.
Factors that would lead to an upgrade or downgrade of the rating:
Factors that could lead to a ratings downgrade are: (1) a
deterioration in the credit quality of the reference assets; and
(2) a decrease in credit enhancement.
Factors that could lead to a ratings upgrade are: (1) an
improvement in the credit quality of the reference assets; and (2)
an increase in credit enhancement.
HUMMINGBIRD SECURITISATION: S&P Ups Rating on JPY3BB Loan to 'BB'
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on one
Japanese synthetic collateralized debt obligation (CDO)
transaction, and removed the rating from CreditWatch with positive
implications.
The upgrade reflects the tranche's synthetic rated
overcollateralization (SROC) level as well as S&P's sensitivity
analyses in line with its criteria. S&P also reviewed the
counterparty risk because the creditworthiness of the tranche
relies on a swap counterparty and collateral asset.
S&P has raised its rating to the level at which the tranche's SROC
level exceeds 100% and meets our minimum cushion requirement as of
the review date.
STANDARD & POOR'S 17G-7 DISCLOSURE REPORT
SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and a
description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.
If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:
http://standardandpoorsdisclosure-17g7.com
RATING RAISED, REMOVED FROM CREDITWATCH POSITIVE
Hummingbird Securitisation Ltd.
Series 2 loan
To From Amount
BB (sf) B+ (sf)/Watch Pos JPY3.0 bil.
====================
N E W Z E A L A N D
====================
SOUTH CANTERBURY FINANCE: Trial Set to End in October
-----------------------------------------------------
The Timaru Herald reports that the end is in sight for the long-
running South Canterbury Finance (SCF) trial, with verdicts to be
handed down in October.
Yesterday [June 27] was the 53rd day of the trial of former SCF
directors Ed Sullivan and Robert White, and former chief executive
Lachie McLeod. The trial is being heard by Justice Paul Heath in
the High Court at Timaru.
On June 27, former SCF chief financial officer Graeme Brown was on
the stand for the fourth day, being cross-examined.
His evidence is likely to wrap up today, June 30, with a three-
week adjournment following, after which the last of the defence
witnesses will be called.
The Timaru Herald notes that closings will then be heard, which
could go into August, and Justice Heath has indicated if all goes
to schedule, the verdicts will be delivered on October 7.
According to the report, Mr. Brown was questioned about the
reporting of impaired loans, where loan values need to be cut,
meaning the lender takes a hit. An email from Mr. White to
Mr. Brown was shown to the court, the report relays.
"Obviously there is a reluctance from the top to address the
reality of an impaired loan in terms of accounting conventions. No
wonder general managers appear to take a short view based on the
impact on their bottom line.
"I can't see why the accounting staff are considered so stupid as
to not be able to understand the issue (of impairment)."
Late SCF chairman Allan Hubbard was keen to get into the Crown
deposit guarantee scheme, Mr. Brown said, but on his terms, The
Timaru Herald relays.
"He wanted input into the development of the scheme."
The report notes that an e-mail was shown to the court relating to
the sale of Wool Services International shares. Mr. Hubbard
needed to find an unrelated party to buy them so it would not
trigger the Takeover Code due to his existing stake, says the
report.
An e-mail from Mr. White to Mr. McLeod showed his frustration with
the deal, the report relates.
"Does (auditor) Byron (Pearson) expect us or Allan Hubbard to find
an individual party who is willing to take up the opportunity to
purchase a holding? He would be better to take a couple of Valium
to settle his nervousness," he said.
According to the report, Mr. Brown was asked if banks were nervous
about lending to finance companies after a number had failed.
"No, I think the banks would have taken the opportunity to
understand their credit risk better," he responded.
Based in New Zealand, South Canterbury Finance Limited
(NZE:SCFHA) -- http://www.scf.co.nz/-- was engaged in the
provision of financial services. The Company's principal
activities were borrowing funds from public and institutional
investors and on lending those funds to the business, plant and
equipment, property, rural and consumer sectors. It typically
advanced funds by means of hire purchase, floor plans, leasing of
plant, vehicles and equipment, personal loans, business term
loans and revolving credit facilities, mortgages against
property, and other financial instruments, including consumer
loan insurance.
On Aug. 31, 2010, Trustees Executors Limited, as trustee for
South Canterbury Finance charging group, appointed Kerryn Downey
and William Black of McGrathNicol as receivers of the charging
group's secured assets.
"As Trustee, we have had South Canterbury Finance under
heightened surveillance since 2008. As part of that, SCF was
granted a Trustee waiver in February 2010 to allow it time to
recapitalize. Unfortunately, the Company's Directors have
advised us that they have not been successful with respect to a
recapitalization and requested us to appoint a receiver. At this
point we, as Trustee, agree that it is the best interests of
debenture, deposit and bond holders to do that," said Yogesh
Mody, Southern Regional Manager for Trustees Executors Limited.
The New Zealand government repaid South Canterbury's 35,000
depositors and stockholders NZ$1.6 billion under the Crown
retail deposit guarantee scheme.
TECTONIC CONSTRUCTION: Homeowners Lose Out as Firm Collapses
------------------------------------------------------------
Stuff.co.nz reports that a Canterbury homeowner has been left
hundreds of thousands of dollars out of pocket after a
Christchurch firm seemingly went bust while building her house.
At least three other homeowners have also lost their deposit to
the company, and several subcontractors were never paid for their
work, the report says.
Stuff.co.nz relates that Erica McLachlan paid developer and
builder Tectonic more than $220,000 in advances for a land and
house package in Kaiapoi's Silverstream development. However,
construction of the house stalled earlier this year before the
painting, carpeting, cladding, plumbing and electricity work was
complete.
Silverstream Estate said it was never paid for the land, and a
former Tectonic Construction employee confirmed almost none of the
subbies were paid, according to the report.
"I just can't believe this whole thing is happening. It's like a
bad, bad dream," Stuff.co.nz quotes Mr. McLachlan as saying.
Tectonic's sole director Steve Hicks could not be reached for
comment, the report relates.
====================
S O U T H K O R E A
====================
DONGBU GROUP: Crisis Looms After Asset Sale Deal Collapses
----------------------------------------------------------
Yonhap News reports that cash-starved Dongbu Group, South Korea's
18th-largest conglomerate, is at risk of falling into a deeper
hole as its affiliates are likely to face hurdles in refinancing
maturing debts following the failure of a deal to sell its key
assets, analysts said on June 27.
The news agency says Dongbu, whose business portfolio ranges from
insurance and construction to steelmaking, has been under pressure
from its creditors to beef up its worsening financial status.
Late last year, Yonhap recounts, Dongbu said it would raise
KRW3 trillion by selling two of its key affiliates and other
assets in a bid to improve its severe financial problem. But this
week, its self-rescue efforts hit a stumbling block as POSCO, the
nation's biggest steelmaker, withdrew its bid for a steel mill
under Dongbu Steel Co. and Dongbu Power Dangjin Corp.
According to the report, POSCO's withdrawal sparked concerns that
Dongbu's cash shortage may further deepen, leading to a downgrade
in credit ratings of its key affiliates such as Dongbu Engineering
& Construction Co., Dongbu Metal Co. and Dongbu CNI Co. Their
bonds were graded as "speculative" meaning that they hold
substantial risks of default.
Selling the flagship units is the key to Dongbu's self-rescue plan
through which it hopes it will be able to get back on its feet,
the report notes.
"Dongbu's financial risk may further worsen as its self-rescue
plans are expected to be further delayed," Yonhap quotes Yoon Su-
yong, an analyst at Korea Ratings, a local rating appraiser, as
saying.
Yonhap states that Dongbu's manufacturing affiliates have to
refinance or pay back maturing debts worth 220 billion won (US$217
million) this year, half of which are due next month. But they
have been suffering losses for the past few years with cash on
hand waning.
Yonhap reports that Dongbu CNI said in a regulatory filing that it
has decided to drop its plan to sell bonds worth 25 billion won to
refinance 50 billion won worth of debts due next month, adding
that it would repay the debt with its cash and other liquid
assets.
The group's IT affiliate may be put under court receivership if it
fails to refinance or pay back the maturing debt, Yonhap reports
citing market watchers.
"Given the current cash flow, the refinancing of maturing debts by
Dongbu affiliates is not easy," an analyst at Samsung Securities,
asking not to be named, told Yonhap. "Some of them may file for
court receivership."
Dongbu is a South Korean conglomerate corporation which operates
through seven business segments with 42 subsidiaries and 35,000
employees. The Group produces industry, chemical, shipping,
insurance and financial products.
STX CORP: STX Dalian Units File For Bankruptcy Protection
---------------------------------------------------------
Yonhap News reports that six subsidiaries of STX Dalian Group, STX
Corp.'s China unit, have filed for bankruptcy court protection in
the country's northeastern Liaoning province as they struggle with
mounting debts, China's state-run media reported Saturday [June
28].
According to Yonhap, the China Daily reported that the filing to
seek "bankruptcy reorganization proceedings" by the six affiliates
of STX Dalian, including STX (Dalian) Shipbuilding Co. and STX
(Dalian) Engine Co., was made with the Dalian Intermediate
People's Court on June 26.
Creditors must submit claims to the six subsidiaries before
Sept. 26, the report said, citing a statement issued by the Dalian
court, Yonhap relates.
STX Corp., a troubled South Korean shipbuilding and shipping
company, established the Chinese unit in 2007, Yonhap discloses.
Yonhap notes that hit by a global slump in the shipbuilding and
shipping industries, the South Korean company has been struggling
to repay debts with fundraising efforts.
A shipyard of STX Dalian, which has more than 21,000 employees,
has not paid workers for months, the report, as cited by Yonhap,
said.
About STX Group
STX Group, once South Korea's 13th-biggest conglomerate, is
struggling to deal with a liquidity shortage and mounting debts of
its major affiliates from a downturn in the shipbuilding and
shipping sectors.
STX Offshore and two other units of the STX Group had voluntarily
sought debt rescheduling with their creditors, Bloomberg News
reported.
STX Pan Ocean sought court receivership after Korea Development
Bank, the main creditor and Pan Ocean's second-biggest
shareholder, decided against buying the company from STX Group,
Bloomberg News reported.
STX Group has 10 affiliates, including STX Pan Ocean and STX
Offshore & Shipbuilding, under its wing.
=============
V I E T N A M
=============
VIETNAM: S&P Affirms 'BB-' LT Sovereign Credit Rating
-----------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' long-term
and 'B' short-term sovereign credit ratings on the Socialist
Republic of Vietnam. The outlook on the long-term rating is
stable. S&P also affirmed its issue ratings on Vietnam's debt and
its 'axBB+' long-term and 'axB' short-term ASEAN regional scale
rating on Vietnam. The transfer and convertibility (T&C)
assessment remains 'BB-'.
RATIONALE
The ratings on Vietnam reflect the country's low-income economy,
underdeveloped monetary framework and capital markets, and the
risks posed by an evolving policy and institutional setting that
has not kept pace with the economy's structural transformation.
Vietnam's strengthening external profile, with its rising foreign
exchange reserves and modest net narrow external debt, supports
the rating.
Vietnam's low average income, which S&P projects at US$2,149 in
2014, is a key constraint for the rating. S&P believes this
income level affords Vietnam lower fiscal and monetary policy
flexibility than sovereigns with greater average incomes. This
suggests Vietnam has a commensurately lower capacity to respond to
economic shocks and to take drastic measures to avoid default.
Nevertheless, Vietnam's growth potential is robust, given an
export manufacturing sector that is well-diversified and
increasingly oriented toward higher value-added goods, a rising
share of services and manufacturing in economic output, and the
growth of the private sector. S&P projects Vietnam to reach lower
middle-income status by 2017, with a per capita GDP exceeding
US$3,000.
The current, relatively subdued pace of growth reflects a policy
choice that prioritizes economic stability while allowing time to
reform the weak banking sector and inefficient state-owned
companies. The prevailing weak domestic consumption and
investment are a reflection of this adjustment period. S&P
projects real per capita GDP growth to average 5% for 2014-2017,
somewhat below potential and recent historical trends.
Although stabilization measures undertaken over the past two years
have dampened growth, they have also restored macroeconomic
stability, resulting in relatively low and stable inflation,
higher confidence in the local currency, and a much improved
external liquidity. This has boosted the perception of policy
credibility, despite economic management and policymaking lagging
behind the economy's large-scale transformation over the past two
decades.
Policymaking is highly centralized and opaque, while
implementation tends to rely on directives instead of market
mechanisms. The inherent conflict in maintaining a significant
role for the state in the economy while striving for greater
efficiency and productivity, which only a market economy offers,
hinders the development of policymaking and economic management.
These institutional shortcomings harbor the possibility that
sovereign credit metrics could deteriorate when changing economic
conditions are not countered by timely and effective responses.
Although Vietnam recently reined in its inflation, its monetary
policy framework is weak by international standards and acts as a
rating constraint. The central bank does not pursue its own
medium- or long-term inflation objective. It lacks independence
and is effectively a policy arm of the government in charge of
implementing directives based on the National Assembly's economic
targets. Lack of transparency and institutional capacity also
limit the central bank's effectiveness. The absence of policy
tools and the underdeveloped state of financial markets hampers
the monetary transmission mechanism. Policy rate movements have
little or no real impact because the lending rate is based on cost
of funds, which in turn is determined by the prevailing deposit
rate caps. The use of rate caps as a means of influencing
liquidity conditions and channeling credit to priority areas is
prevalent but it distorts credit markets and blunts the
transmission mechanism of official rates.
Vietnam's improving external liquidity and moderate foreign debt
position supports its creditworthiness. The sovereign's external
borrowings remain modest with low-cost debt and long maturity, and
we project that gross external debt will decline to about 30% of
GDP in the next three years. At the same time, S&P expects gross
external financing needs will remain in a comfortable range of
80%-90% of the sum of current account receipts and usable reserves
in this period. The favorable outlook for Vietnam's external
profile is based on S&P's expectation of little or no commercial
external borrowing by the sovereign, along with continuing overall
balance-of-payment surpluses, driven by net inflows of foreign
direct investments of about 4% of GDP and a dynamic export sector.
We expect exports to get a further boost from recent and pending
free trade agreements.
OUTLOOK
The stable outlook on the ratings reflects S&P's expectation that,
over the next 12-18 months, Vietnam's policy stance will ensure
macroeconomic stability, cementing the economic improvements and
gains in policy credibility. The outlook also incorporates S&P's
expectations that the government's key reform objectives targeting
the banking sector and state-owned enterprises will continue, and
the risks and inefficiencies posed by these sectors will reduce.
S&P may lower the ratings if macroeconomic imbalances reemerge,
with a marked deterioration in one or more key credit metrics.
S&P may raise the ratings if there are indications that Vietnam is
able to generate per capita real GDP growth of more than 5.5% in
the next five to 10 years without causing macroeconomic
imbalances. S&P may also raise the ratings on signs of improved
institutional and governance effectiveness, likely based on
greater macroeconomic policy consistency and tangible progress in
structural reforms.
In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the
methodology applicable. At the onset of the committee, the chair
confirmed that the information provided to the Rating Committee by
the primary analyst had been distributed in a timely manner and
was sufficient for Committee members to make an informed decision.
After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts. The chair
ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision.
The views and the decision of the rating committee are summarized
in the above rationale and outlook.
RATINGS LIST
Ratings Affirmed
Vietnam (Socialist Republic of)
Sovereign Credit Rating BB-/Stable/B
ASEAN Regional Scale axBB+/--/axB
Vietnam (Socialist Republic of)
Senior Unsecured BB-
Commercial Paper B
*********
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 ***