/raid1/www/Hosts/bankrupt/TCRAP_Public/140731.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, July 31, 2014, Vol. 17, No. 150
Headlines
A U S T R A L I A
CNC BUILDING: In Administration, Leaves 110 Workers Without Pay
LINKS PLUMBING: Placed in Administration
MOUNT LYELL: Two Hospitality Businesses Go Into Administration
MURRAWEE FARMS: Coles Supplier Sues Over Forced Sale
PENRICE SODA: Creditors Expect to Get 3.1c in the Dollar Payout
WANNIASSA NEWSAGENCY: Placed Into Liquidation
* AUSTRALIA: SMEs Face Biggest Insolvency Risk, Study Shows
* AUSTRALIA: West Australia Corporate Failures Twice the Average
C H I N A
KWG PROPERTY: Moody's Assigns B1 Rating to US$ Sr. Unsec. Notes
KWG PROPERTY: S&P Assigns 'B+' Rating to Proposed US$ Sr. Notes
I N D I A
COUNTY INFRASTRUCTURES: CRISIL Suspends 'B' Rating on INR1BB Loan
IMMENSE INDUSTRIES: CRISIL Ups Rating on INR100MM Loan to 'B+'
INDERJIT FORGING: CRISIL Reaffirms B- Rating on INR54.5MM Loans
GORAYA INDUSTRIES: CRISIL Assigns 'B+' Rating to INR120MM Loans
GURU KIRPA: CRISIL Reaffirms B+ Rating on INR92.5MM Loan
JANARDHAN PLYBOARD: CRISIL Ups Rating on INR66.5MM Loans From 'D'
JANKI DASS: CRISIL Suspends 'B-' Rating on INR250MM Loans
JEEVAN SAAR: ICRA Downgrades Rating on INR19cr Loan to 'D'
KALPANA NATURAL: CRISIL Assigns 'B' Rating to INR135MM Loans
KISSAN SOLVEX: CRISIL Reaffirms 'B' Rating on INR100MM Loan
MAHESH GINNING: CRISIL Reaffirms 'B+' Rating on INR60MM Loan
MYSORE FRUIT: CRISIL Suspends 'B' Rating on INR160.6MM Loans
N.S.K BUILDERS: CRISIL Assigns 'B' Rating to INR175MM Loans
NAMISON POWERTECH: CRISIL Suspends 'B-' Rating on INR30MM Loans
PANORAMA APPARELS: CRISIL Suspends 'D' Rating on INR100.5MM Loans
PAWANSUT CONSTRUCTION: CRISIL Puts B Rating on INR35MM Loans
PONNERI STEEL: CRISIL Suspends B+ Rating on INR186.8MM Loans
POWER TECH: ICRA Lowers Rating on INR6.50cr Loan to 'D'
PULIMOOTTIL SILKS: CRISIL Assigns B+ Rating to INR80MM Loans
RAJARAJAN & SONS: CRISIL Suspends 'B' Rating on INR264.5MM Loans
R D GOLDEN: CRISIL Reaffirms 'B+' Rating on INR70MM Loan
RIGID HOSPITALS: CRISIL Suspends 'B' Rating on INR300MM Loan
SALONA COTSPIN: CRISIL Suspends 'D' Rating on INR530MM Loans
SEVEN PILLARS: CRISIL Suspends 'B' Rating on INR80MM Bank Loan
SHREE MAHAVIR: CRISIL Assigns 'D' Rating to INR85.8MM Loans
SLO STEEL: CRISIL Suspends 'B' Rating on INR250MM Loan
SRI DEVI: CRISIL Suspends 'B+' Rating on INR58.7MM Loans
SUNDER IMPEX: CRISIL Suspends 'B+' Rating on INR25MM Loan
TATA STEEL: Fitch Assigns 'BB+' Rating on USD1BB Sr. Unsec. Notes
UNITECH FABRICATORS: CRISIL Reaffirms B+ Rating on INR50MM Loan
UTTAM FINE: CRISIL Assigns 'D' Rating to INR180MM Loans
VIGEL MANUFACTURING: CRISIL Suspends B- Rating on INR10MM Loan
J A P A N
SIGNUM VANGUARD: S&P Raises Rating on Class A Loan to 'BB'
S I N G A P O R E
GCX LIMITED: Fitch Assigns 'BB+' Rating on USD350MM Sr. Notes
S R I L A N K A
CEYLON DOLLAR: Fitch Puts 'BB-' Fund Credit Rating on Bond Fund
V I E T N A M
VIETNAM: Moody's Hikes Issuer & Sr. Unsecured Bond Ratings to B1
- - - - -
=================
A U S T R A L I A
=================
CNC BUILDING: In Administration, Leaves 110 Workers Without Pay
---------------------------------------------------------------
dailytelegraph.com.au reports that more than 100 Blacktown
Hospital construction workers were short-changed after
subcontractor CNC Building Contractors went into administration.
Construction, Forestry, Mining and Energy Union spokesman Rebel
Hanlon said 110 structural workers, including 30 on 457 visas, two
on spousal visas and six on holiday visas, had not received their
pay or superannuation benefits from CNC, according to
dailytelegraph.com.au.
The report notes that people coming to Australia on a 457 visa or
temporary skilled work visa are sponsored by a business and can
work for this company for up to four years.
The affected workers were hired as steel and concrete fixers.
Work continued at Blacktown Hospital when Laing O'Rourke secured
alternative jobs for 90 of the affected tradespeople on the site,
the report discloses.
But Mr. Hanlon accused Laing O'Rourke of not having the due
diligence to determine whether CNC Building Contractors were
financially viable and for overlooking CNC's alleged "taxation
rorts", the report relays.
A Laing O'Rourke spokesman said the international engineering
company had an extensive due diligence process when hiring all
subcontractors, the report says.
The report adds that Mr. Hanlon claimed CNC was paying workers
different hourly rates and hiring unqualified contractors.
The Laing O'Rourke spokesman said CNC was under investigation by
the Fair Work authority and the Construction Compliance Unit of
Service NSW, the report relays.
The spokesman said the workers were expected to receive their
remaining entitlements sometime this week, the report adds.
LINKS PLUMBING: Placed in Administration
----------------------------------------
Gavin Moss and Nick Combis of Vincents Chartered Accountants were
appointed as administrators of Links Plumbing Services Pty Ltd on
July 28, 2014.
A first meeting of the creditors of the Company will be held at
the meeting room of Vincents Chartered Accountants, Level 19, MLC
Centre, 19-29 Martin Place, in Sydney, on Aug. 7, 2014, at
3:00 p.m.
MOUNT LYELL: Two Hospitality Businesses Go Into Administration
--------------------------------------------------------------
ABC News reports that two hospitality businesses on Tasmania's
West Coast have gone into administration in the wake of the
closure of the Mount Lyell copper mine.
More than 200 jobs were lost earlier this month when Australia's
oldest mine closed after a spate of deadly accidents, the report
says. The site had been mined since 1883 and mining was vital to
the region's economy.
ABC News relates that in the mining hub of Queenstown, at the foot
of the Mt Lyell mine, two formerly bustling pubs have been handed
over to administrators.
According to the report, the owner of both the Mount Lyell Motor
Inn and the Railway Hotel in Queenstown, Mick Courto, confirmed
the businesses went into administration on July 28 but he declined
to comment further.
The Railway Hotel was a regular drinking spot for the town's
miners, the report notes.
But Mr. Courto said the hotels remain open and it is unclear if
either of the businesses will have to close, according to ABC
News.
He had been in talks with administrators Paul Cook and Associates
who now control the hotels, the report says.
MURRAWEE FARMS: Coles Supplier Sues Over Forced Sale
----------------------------------------------------
Sarah Danckert at The Australian reports that the former owners of
one Australia's largest orchard properties and a key supplier of
stone fruits to Coles, the Tripodi family, have launched legal
action against the forced sale of the Murrawee Farms through a
receivership process last year.
The Australian relates that the farm, in the Victorian
agricultural hub of Swan Hill, has since been purchased by the
wholesale company used by the family to distribute its fruits
through Coles, Freshmax Farms, which trades as Holman Fresh.
Gaye Tripodi -- who is on the Victorian government's food council
and recently travelled to China with Victorian Premier Denis
Napthine on a trade mission -- and her husband Tony are suing
National Australia Bank, Freshmax Farms and receivers Sellers
Muldoon & Benton, seeking orders for the sale of the property be
declared null and void, and costs, according to The Australian.
NAB, Freshmax Farms and Sellers Muldoon & Benton plan to defend
the action, the report notes.
According to the Tripodis' claim filed to the Federal Court on
July 22, the family lodged a complaint with the Financial Services
Ombudsman, challenging NAB's decision to call in the loan, The
Australian reports.
The report says the Tripodis allege their properties were sold to
Freshmax Farm ahead of a ruling by the Ombudsman regarding
receivership of Murrawee Farms and related entities.
As such, the Tripodis have also joined the Financial Services
Ombudsman to their claim, the report relays.
The Australian relates that the Tripodis allege they also made an
offer to buy the farm, which they believe was higher than Freshmax
Farms' offer but was allegedly rejected by the receivers.
Mrs. Tripodi told The Australian that the family was given an hour
to leave the stone fruit, grape and oats farm they had operated
since 1992.
"We feel as though we have been bullied by the bank," the report
quotes Mrs. Tripodi, who has also headed the Victorian Farmers
Federation's Horticulture Group, as saying.
"There's been a lot of work by the federal and state governments
to open up access to markets in the past 12 months . . . we have
the banks trying to screw us all, and tick us off the list one by
one.
"We're taking one step forward and the banks are making us take
two steps backwards."
To further their claim, The Australian notes, the Tripodis have
secured the help of anti-bank activist Geoff Shannon of Unhappy
Banking.
A spokeswoman for NAB said: "We have worked with the customers
involved for a number of years to resolve this matter.
"We are committed to supporting good quality and sustainable
agribusinesses and assess all lending on a case-by-case basis."
The Australian relates that Sellers Muldoon & Benton receiver Ken
Sellers -- ksellers@smbvic.com.au -- said the claim was without
foundation, the report adds.
They said the Tripodis were given "ample" time to leave the farm
and still occupied a property adjacent to the farm, which he said
was subject to the receivership, The Australian reports.
"The offer that was accepted for the assets in question was the
best offer. The Tripodi offer was not the best offer," the report
quotes Mr. Sellers as saying.
PENRICE SODA: Creditors Expect to Get 3.1c in the Dollar Payout
---------------------------------------------------------------
Andrew Main at The Australian reports that there was nothing but
bad news for creditors and the 180 former employees of Penrice
Soda Holdings, the Adelaide company that went into administration
in April.
A report by administrators McGrathNicol said creditors could
expect no more than about 3.1 cents in the dollar and staff would
have to apply to the government's Fair Entitlement Guarantee
scheme to obtain the entitlements they were owed, The Australian
relates.
Penrice collapsed with debts of about AUD150 million and both
National Australia Bank and Westpac are expected to take a haircut
on the AUD111 million in loans they advanced to the company.
According to The Australian, a spokesman for McGrathNicol said
they would be recommending the company be liquidated at the
creditors' meeting scheduled today, July 31.
In an "estimated outcome for creditors" document circulated to
creditors, McGrathNicol said there were AUD126.1 million worth of
claims against the company, and even the low 3.172c in the dollar
return was predicated on a successful legal claim, which
McGrathNicol warned was unlikely to occur, The Australian relays.
It may be less than 0.4 of a cent, it warned.
Ordinary shareholders saw their shares drop from AUD1 in 2009 to
4.9c before the collapse. They are unlikely to recover anything
from a liquidation, The Australian discloses.
The Australian adds that McGrathNicol has canvassed a legal action
over insolvent trading but warned that pursuing such a course
would be expensive and could take two years to resolve.
WANNIASSA NEWSAGENCY: Placed Into Liquidation
---------------------------------------------
The Canberra Times reports that customers of the Wanniassa
Newsagency and licensed Australia Post store will have services
delivered from other outlets after the business was placed into
liquidation last week.
The report relates that a notice posted by the owners of the
store, part of the Wanniassa shopping centre in Sangster Place,
said the business had stopped trading and home deliveries of
newspapers would be taken over by Southlands Newsagency sometime
this week.
Southlands Newsagency is in the Mawson shopping centre, off Mawson
Drive. The newsagency sells papers and magazines, as well as
providing lotto, stationery and other services, the report notes.
According to The Canberra Times, a separate notice posted by
Australia Post said the shop would be closed "until further
notice" and apologised to customers for any inconvenience caused
by the liquidation.
The Australia Post website no longer lists the Wanniassa licensed
post office, instead showing the nearest locations at the Erindale
Centre in Comrie Street, Halley Street in Chifley and Farrer Place
in Farrer, the report says.
The Canberra Times states that the popular shopping centre has
struggled with some recent closures, including the August 2008
withdrawal of the company behind the Wanniassa Medical Centre.
That decision sparked a community campaign for the provision of
essential services, seeing more than 2,000 people sign a petition
to the operators, Primary Health Care, the report relates.
The Canberra Times relates that an Australia Post spokeswoman
confirmed the operators of the newsagency and Wanniassa Post
Office have gone into liquidation.
"Australia Post is currently working with the liquidator to
determine what the closure of the newsagency means for the ongoing
operation of the post office," she said in a statement, the report
relates.
"Australia Post apologises for any inconvenience this unexpected
change in service may cause."
The Canberra Times adds that the spokeswoman said all post office
box addressed mail and carded articles will be available for
collection over the counter at Tuggeranong Post Office, located at
Hyperdome Shopping Centre.
According to the report, Frank Walmsley of Capital Commercial
Business Sales said his company was working with liquidators to
sell the newsagency.
"It make take a week or so to finalise the transfer of operations,
but the new potential operators are keen to start serving the
people of Wanniassa as soon as possible and would love to work
with Australia Post to see the continuation of services in this
retail offering," he said in a statement, the report adds.
* AUSTRALIA: SMEs Face Biggest Insolvency Risk, Study Shows
-----------------------------------------------------------
Kirsten Robb at SmartCompany reports that around 81% of Australian
companies that collapsed in 2012-13 had fewer than 20 employees,
according to a study released on July 29.
SmartCompany relates that while insolvencies have dropped by 19%,
the Insolvency Report 2014 showed around 10,000 businesses and
more than 30,000 individuals still enter some form of insolvency
administration every year.
The report, commissioned by Jones Partners and based on analysis
of Treasury, bank, economic and industry insolvency data, showed
SME collapses resulted in the loss of more than 74,000 jobs in
2012-13, according to SmartCompany.
In comparison, larger collapses of companies with more than 200
employees resulted in around 6,250 job losses, SmartCompany
relays.
Michael Jones, managing principal at Jones Partners, told
SmartCompany while mainstream media often focuses on larger
collapses, SME insolvencies have a far greater impact on
unemployment.
SmartCompany relates that Mr. Jones, who has managed insolvencies
for more than 20 years, said the SME sector is always hardest hit
by insolvencies because it is the area of the economy that takes
the most risks.
"That's where innovation and enterprise happens," SmartCompany
quotes Mr. Jones as saying. "This is where rags-to-riches tales
are, where the dynamism is in the economy."
The report showed the four major reasons for SME collapses are bad
strategic management, cash flow, lack of profit and failure to
maintain books and reports, SmartCompany says.
But Mr. Jones said these causes all boil down to management
issues, SmartCompany relays.
"These are companies with less than 20 employees," Mr. Jones, as
cited by SmartCompany, said. "We're not talking about corporate
Australia with chairmen and financial officers. We're talking
about a guy who runs a crane with five guys working for him."
"In SMEs you cannot separate ownership from management. If you
have bad management, you generally can't sack the managers because
they're the owners. You have to change their style of management
or get them out of management," Mr. Jones told SmartCompany.
* AUSTRALIA: West Australia Corporate Failures Twice the Average
----------------------------------------------------------------
Kim Macdonald at The West Australian reports that West Australia
businesses are failing at twice the rate of the national average,
according to new research by Dunn & Bradstreet.
There were 696 business failures in WA in the second quarter of
this year, a 21 per cent increase on the 575 recorded a year
earlier, the report discloses.
Nationally, the growth in the rate of business failures jumped
only 9.6 per cent when comparing the two quarters, The West
Australian relays.
According to The West Australian, the research showed 9,927
businesses around Australia sought legal relief from creditors or
became insolvent in the second quarter compared with 9,056 a year
ago.
"WA is certainly lagging for the first time in goodness knows how
many years," the report quotes market economics adviser Stephen
Koukoulas as saying. "There is a general theme we are seeing
across other WA data and that is that the economy is coming off
the boil, which is due to the slow down in investment the mining
sector."
The West Australian adds that the research showed further bad news
for WA, with the local start-up rate also below the national
average.
There were 5,587 new businesses in WA in the last quarter, up only
marginally on the 5,389 starts in the second quarter of last year,
the report discloses. Nationally, 62,160 enterprises started
during the second quarter of this year, up substantially from the
57,504 that commenced operations in the same quarter last year.
"People are usually reluctant to start a business when there are
signs the economy is not doing so well," Mr. Koukoulas, as cited
by The West Australian, said.
=========
C H I N A
=========
KWG PROPERTY: Moody's Assigns B1 Rating to US$ Sr. Unsec. Notes
---------------------------------------------------------------
Moody's Investors Service has assigned a B1 rating to the USD
senior unsecured notes proposed by KWG Property Holding Limited.
The rating outlook is negative.
The proceeds of the notes will be used to refinance KWG's existing
debt and to fund its property projects.
Ratings Rationale
"The proposed notes will improve KWG's debt maturity profile, as
the majority of the proceeds will be used to refinance the
company's existing debt," says Franco Leung, a Moody's Vice
President and Senior Analyst.
Moody's believes that the proposed notes would also strengthen
KWG's liquidity profile. Moody's estimates that KWG's cash
holdings and its projected operating cash flows would fully
support its committed land payments, repayment of maturing debt
and dividend payments over the next 12 months.
KWG's liquidity profile has been strong over the past 1-2 years.
The company reported a larger-than-expected increase in cash on
hand of RMB10.9 billion at end-2013, from RMB6.4 billion at end-
2012, thereby improving its cash to short-term debt to 354% from
208%. The ratio was better than its similarly rated domestic
peers.
KWG's strong liquidity profile is partly supported by its stable
contracted sales growth. Its contracted sales reached around RMB10
billion in the first six months of 2014. The company is therefore
on track to meet its full-year target of RMB21 billion.
"On the other hand, KWG's overall credit metrics remain weak for
its Ba3 corporate family rating," adds Leung who is also the Lead
Analyst for KWG.
Moody's says KWG's debt leverage and interest coverage will likely
remain at the weaker end of its Ba corporate family rating range,
unless the company is committed to reducing its debt levels.
Consequently, any aggressive debt-funded land acquisitions or
weakening in revenue generation could pressure its corporate
family rating.
KWG's Ba3 rating continues to reflect its strong brand name,
supported by its good quality and diversified products, consisting
of office, retail and residential properties that command premium
pricing. The rating also recognizes the firm's good operating
track record in Guangzhou, Chengdu, Suzhou and Shanghai.
Moody's would consider downgrading KWG's ratings if it: (1) does
not achieve strong sales growth; (2) materially increases its
investments in projects, such that its liquidity or leverage
positions come under pressure; (3) shows evidence of a material
weakening of its profitability; and/or (4) shows a deterioration
in its interest coverage, such that its adjusted EBITDA/interest
falls below 2.0x-2.5x, or its debt leverage further rises.
Given KWG's negative rating outlook, its rating is unlikely to be
upgraded.
Nevertheless, its rating outlook could return to stable if KWG:
(1) continues its prudent approach to financial management,
including the maintenance of a good liquidity buffer, and its
cautious approach to business expansion; or (2) improves its
interest coverage and manages down its current debt leverage, such
that its financial flexibility improves.
The principal methodology used in this rating was the Global
Homebuilding Industry published in March 2009.
KWG Property Holding Limited is a Chinese property developer
founded in 1995. It had a total attributable land bank of around
10 million sqm in gross floor area in Guangzhou, Chengdu, Suzhou,
Beijing, Shanghai, Tianjin and Hainan, Hangzhou and Nanning at
end-2013.
The company mainly develops mid- to high-end residential
properties, office buildings, shopping malls and hotels.
KWG PROPERTY: S&P Assigns 'B+' Rating to Proposed US$ Sr. Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' long-term
issue rating to a proposed issue of U.S.-dollar-denominated senior
unsecured notes by KWG Property Holding Ltd. (BB-/Negative/ -- ;
cnBB/ -- ). S&P also assigned its 'cnBB-' Greater China regional
scale rating to the proposed notes. KWG will use the issue
proceeds to refinance existing debt and to finance existing and
new projects. The ratings on the notes are subject to S&P's
review of the final issuance documentation.
The issue rating is one notch lower than the corporate credit
rating on KWG due to structural subordination.
The corporate credit rating on KWG reflects the company's weaker
leverage than that of similarly-rated companies, high exposure to
the high-end residential property segment, and execution risk in
new cities. However, KWG's well-distributed projects in major
cities, good brand recognition and product quality, improving
sales execution, and above-average profit margins temper these
weaknesses. The significant cash flow contribution from KWG's
jointly controlled entities and abundant cash holdings also
support the rating.
The negative outlook on the issuer rating reflects S&P's view that
KWG's leverage will remain high in the next 12 months. S&P also
expects the company to control its debt-funded expansion and
manage its balance sheet with discipline. S&P expects KWG's
leverage to improve in the next 12-18 months, resulting from
strong property sales and a prudent land banking strategy.
However, in S&P's base-case scenario, the company's debt-to-EBITDA
ratio will likely remain above 5x.
=========
I N D I A
=========
COUNTY INFRASTRUCTURES: CRISIL Suspends 'B' Rating on INR1BB Loan
-----------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of County
Infrastructures Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 1,000 CRISIL B/Stable Suspended
The suspension of ratings is on account of non-cooperation by CIPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, CIPL is yet to
provide adequate information to enable CRISIL to assess CIPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'.
Established in 2010 as a special purpose vehicle by ABA Builders
Ltd and Kailashpati Developers India Pvt Ltd, CIPL is constructing
a residential complex, Cherry County, in Noida Extension (Uttar
Pradesh).
IMMENSE INDUSTRIES: CRISIL Ups Rating on INR100MM Loan to 'B+'
--------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Immense Industries Pvt Ltd to 'CRISIL B+/Stable' from 'CRISIL
B/Stable' and reaffirmed its rating on the company's short-term
bank facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Letter of Credit 350 CRISIL A4 (Reaffirmed)
The rating upgrade reflects CRISIL's belief that IIPL's financial
risk profile will improve significantly, driven by expected
improvement in capital structure and debt protection measures. The
improvement will be supported by incremental equity infusion of
INR46 million and increased cash accruals driven by ramp-up in
operations with enhancement in bank lines. Furthermore, IIPL's
business risk profile will be supported by diversification into
trading of metal and processed yarn, resulting in steep ramp-up of
operations and improvement in profitability.
The ratings reflect IIPL's exposure to risk because of presence in
the fragmented metal and yarn trading business with low
profitability and moderate debtor risk. These rating weaknesses
are partially offset by the extensive experience of IIPL's
promoters in the yarn industry and its moderate financial risk
profile marked by low TOL/TNW and moderate net worth.
Outlook: Stable
CRISIL believes that IIPL will benefit from its promoters'
extensive industry experience and diversification into trading of
metals and processed yarn. The outlook may be revised to
'Positive' in case of significant diversification in IIPL's
customer profile or in case of improvement in its profitability
resulting in substantial accruals. Conversely, the outlook may be
revised to 'Negative' in case of significant stretch in working
capital requirements or deterioration in profitability leading to
deterioration of financial risk profile.
Incorporated in 1988, IIPL trades in yarn and metal products
(scrap ingots). It is based in Delhi, and its day-to-day
operations are managed by Mr. Somnath Harjai.
INDERJIT FORGING: CRISIL Reaffirms B- Rating on INR54.5MM Loans
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Inderjit Forging Pvt
Ltd continue to reflect IFPL's stretched liquidity, driven by
large working capital requirements, its weak financial risk
profile, marked by high gearing and weak debt protection metrics,
and its small scale of operations in the fragmented automotive
parts industry. These rating weaknesses are partially offset by
the extensive industry experience of the company's promoters and
the financial support that it receives from them.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 12.5 CRISIL A4 (Reaffirmed)
Cash Credit 50 CRISIL B-/Stable (Reaffirmed)
Term Loan 4.5 CRISIL B-/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that IFPL will continue to benefit over the medium
term from the extensive industry experience of its promoters and
the financial support that it receives from them. The outlook may
be revised to 'Positive' in case of a substantial and sustained
increase in the company's revenue while it maintains its
profitability margins, or an improvement in its working capital
management, or equity infusion by its promoters, leading to a
significantly better net-worth. Conversely, the outlook may be
revised to 'Negative' if IFPL's revenue or profitability declines,
or its capital structure deteriorates, most likely because of
larger-than-expected working capital requirements or large debt-
funded capital expenditure.
Update
IFPL's revenue registered a 10 per cent year-on-year decline to
around INR295 million in 2013-14 (refers to financial year,
April 1 to March 31); the decline was mainly driven by muted
demand for its products from the end user industry. The company's
operating margin, however, increased by around 60 basis points to
5.3 per cent in 2013-14 on account of its efforts to sell to more
profitable customers.
IFPL's operations are working capital intensive, as reflected in
its gross current assets (GCAs) of around 130 days as on
March 31, 2014; the GCA days have increased as compared with past
levels on account of a delay in payment by one of its clients and
year-end purchase of raw materials. Moreover, it had large
inventory of around 84 days and an overall receivables cycle of 45
days as on this date. As a result, the company's average bank
limit utilisation has been high, at around 101 per cent during
2013-14.
IFPL's net worth remained low at around INR33.4 million, as on
March 31, 2014. The company has substantial debt towards funding
its working capital requirements; this, coupled with its small net
worth, has resulted in a high gearing of 1.92 times as on
March 31, 2014.
IFPL was set up in 1987 by Mr. S Inderjit Singh Anand; it is
currently being managed by his son, Mr. Bhupinder Singh Anand. The
Ludhiana (Punjab)-based company undertakes forging of automotive
parts and manufacturing of tractor parts.
GORAYA INDUSTRIES: CRISIL Assigns 'B+' Rating to INR120MM Loans
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of Goraya Industries - Jalalabad.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 20 CRISIL B+/Stable
Cash Credit 60 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 40 CRISIL B+/Stable
The rating reflects GIJ's weak financial risk profile and its
small scale of operations in the highly fragmented rice processing
industry. These rating weaknesses are partially offset by the
extensive industry experience of the firm's promoters.
Outlook: Stable
CRISIL believes that GIJ will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the firm's financial risk
profile improves, most likely due to higher-than-expected net cash
accruals driven by a significant improvement in its scale of
operations, or infusion of capital. Conversely, the outlook may be
revised to 'Negative' if there is significant deterioration in
GIJ's liquidity or capital structure, or pressure on its
profitability, leading to further deterioration in its financial
risk profile.
GIJ was established in 2010 as a partnership firm by Mr. Inderjit
Singh and his brothers, Mr. Balwinder Singh and Mr. Joginder
Singh, in Jalalabad (Punjab). The firm is engaged in milling and
indirect export of rice, mainly basmati, under its brands, Kashmir
ki Rani and Goraya Gold. The firm is managed by the three
brothers.
GIJ's book profit and net sales were INR21 million and INR143
million, respectively, in 2012-13 (refers to financial year,
April 1 to March 31), against INR0.6 million and INR108 million,
respectively, in 2011-12. It is likely to report sales of INR220
million for 2013-14.
GURU KIRPA: CRISIL Reaffirms B+ Rating on INR92.5MM Loan
--------------------------------------------------------
CRISIL's rating on the bank facilities of Guru Kirpa Rice Mills
continues to reflect GKRM's small scale of operations in the
intensely competitive rice milling industry, susceptibility to
erratic rainfall, and weak financial risk profile marked by a
small net worth, a high gearing, and weak debt protection metrics.
These rating weaknesses are partially offset by the extensive
experience of GKRM's partners in the rice milling industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 92.5 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that GKRM will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the firm's cash accruals
improve because of significant improvement in its scale of
operations or capital structure. Conversely, the outlook may be
revised to 'Negative' in case GKRM registers pressure on its
profitability, or if it undertakes a larger-than-expected increase
in its working capital requirements.
GKRM, established in 2002, was set up as a partnership firm by Mr.
Bhupinder Singh, Mr. Jatinder Singh, and Mr. Partap Singh. The
firm is into milling and processing of basmati rice (Pusa 1121
quality). It has one processing unit at Jalalabad (Punjab), with
milling and processing capacity of 30 tonnes per day. GKRM
primarily sells rice and its by-products in the domestic market.
The majority of its customers are merchant exporters, who export
the rice to the Middle East.
GKRM reported, on a provisional basis, a profit after tax (PAT) of
INR1.6 million on net sales of INR467.4 million for 2013-14,
against a PAT of INR0.85 million on net sales of INR261.0 million
for 2012-13.
JANARDHAN PLYBOARD: CRISIL Ups Rating on INR66.5MM Loans From 'D'
-----------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
Janardhan Plyboard Industries Ltd to 'CRISIL B-/Stable' from
'CRISIL D'
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 45 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Proposed Long Term 3.9 CRISIL B-/Stable (Upgraded
Bank Loan Facility from 'CRISIL D')
Term Loan 17.6 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
The rating upgrade factors in timely servicing of debt by JPIL,
supported by improvement in its liquidity. The improvement in
JPIL's liquidity is supported by faster receivable recovery period
of about one to two months, compared to more than three months in
the past. CRISIL believes that JPIL will sustain the improvement
in its liquidity over the medium term, supported by a controlled
working capital cycle and by adequate cash accruals of INR4
million to INR5 million vis-a-vis its term debt obligation of
about INR3 million in 2014-15 (refers to financial year,
April 1 to March 31).
The rating continues to reflect JPIL's modest scale of operations
in a fragmented industry, constrained financial flexibility due to
large, though smaller than before, working capital requirements,
and weak debt protection metrics. These rating weaknesses are
partially offset by the extensive industry experience of JPIL's
promoters.
Outlook: Stable
CRISIL believes that JPIL will continue to benefit over the medium
term from its management's efforts to shorten its working capital
cycle. The outlook may be revised to 'Positive' if the company
registers higher-than-expected sales and a stable operating
margin, further supported by improving debtor days, resulting in
improvement in its liquidity. Conversely, the outlook may be
revised to 'Negative' if JPIL registers lower-than-expected sales
or substantial reduction in its operating margin, or if it
undertakes a large, debt-funded capital expenditure programme, or
if its working capital cycle deteriorates, leading to
deterioration in its financial risk profile.
JPIL, set up in 1987 by Mr. Anil Goel, manufactures different
grades of plyboard. It was taken over by Mr. Gaurav Singhal, Mr.
Vijender Shah, Mr. Sanjay Taneja, and Mr. Deepak Sudheja, in 2011.
The manufacturing facility of the company is located at Dehradun
(Uttarakhand).
JPIL's profit after tax (PAT) is estimated at INR0.5 million on
net sales of INR35 million for 2013-14 (refers to financial year,
April 1 to March 31), against a PAT of INR0.6 million on net sales
of INR71 million in 2012-13.
JANKI DASS: CRISIL Suspends 'B-' Rating on INR250MM Loans
---------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Janki
Dass Rice Mills.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B-/Stable Suspended
Packing Credit 200 CRISIL B-/Stable Suspended
The suspension of ratings is on account of non-cooperation by JDRM
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, JDRM is yet to
provide adequate information to enable CRISIL to assess JDRM's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'.
Set up in 1986 as a partnership firm, JDRM is currently managed by
Mr. Ravinder Kumar and his brother, Mr. Rajesh Kumar. The firm
processes basmati rice (PUSA 1121 grade) at its plant in Taraori
in Karnal (Haryana).
JEEVAN SAAR: ICRA Downgrades Rating on INR19cr Loan to 'D'
----------------------------------------------------------
ICRA has downgraded the long-term rating assigned to the INR19.00
crore fund based bank facilities of Jeevan Saar Educational
Society to [ICRA]D from [ICRA]C+ earlier.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limits 19.00 [ICRA]D downgraded
The rating downgrade takes into account the delays in servicing of
interest obligations by the society on account of its stretched
liquidity position owing to the initial gestation period of the
school (which commenced operations in AY2012-13), stretched
capital structure of the society and the resultant cash losses.
While there has been an improvement in the enrolments in the
current academic year (AY2014-15) to 360 students from 64 students
in the previous academic year, the liquidity position of the
society continues to remain weak given the high operating and
interest costs, resulting in continued dependence on funding
support from the member group for servicing of the debt
obligations.
Although ICRA takes note of the operational and management
expertise available to the society by virtue of its association
with Child Education Society (which owns the Bal Bharati Brand);
the strengths are largely offset by the concerns mentioned above.
In ICRA's view, timely receipt of the funding support from the
member group will remain critical for debt servicing in the near
term and hence would be a key rating driver. This apart, the
ability of the society to attract and improve fresh enrolments; as
well as scale and funding mix of future capital expenditure, if
any, will be critical drivers of society's credit profile in the
long term and would be the key rating sensitivities.
Jeevan Saar Educational Society manages Bal Bharati Public School
in Bhiwadi, Rajasthan. The school became operational in the
academic session AY2012-13 and at present caters to 360 students
till VII standard. The school proposes to apply for CBSE
affiliation in FY2015 as well as commence admissions for Standard
VIII from AY 2015-16 onwards.
Recent Results
The society reported an operating loss of INR1.60 crore and a cash
loss of INR1.88 crore (excluding capitalized interest of INR2.76
crore) on revenue receipts of INR0.22 crore in FY2013.
As per provisional estimates, the society has reported INR0.62
crore of revenue receipts for FY2014.
KALPANA NATURAL: CRISIL Assigns 'B' Rating to INR135MM Loans
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facilities of Kalpana Natural Forest Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 65 CRISIL B/Stable
Term Loan 70 CRISIL B/Stable
The rating reflects KNFPL's small scale of operations, along with
exposure to high funding risk for the real estate project,
accentuated by low customer advances. The rating also factors in
the company's weak financial risk profile, commensurate with its
capital structure and debt protection metrics; and its scheduled
debt obligations. These rating weaknesses are mitigated by the
extensive industry experience of the promoters in the real estate
and tendu leaves trading and processing segments, and the advanced
stage of project implementation.
Outlook: Stable
CRISIL believes that KNFPL will benefit over the medium term, from
the promoters' extensive industry experience. The outlook may be
revised to 'Positive' if the company improves its liquidity with
timely completion of the ongoing project, within the budgeted
cost, and with sizeable customer advances. Conversely, the outlook
may be revised to 'Negative' if KNFPL's liquidity weakens with
time or cost overruns in the ongoing project, or significantly low
advances from its customers, or any other large debt-funded
projects.
KNFPL was founded by the Korba-based Agrawal family, and is a part
of the Plam group. The company undertakes real estate projects and
trades in tendu leaves. KNFPL is currently developing a
residential real estate project named Palm Enclave in Bilaspur.
KISSAN SOLVEX: CRISIL Reaffirms 'B' Rating on INR100MM Loan
-----------------------------------------------------------
CRISIL's rating on the bank facilities of Kissan Solvex Pvt Ltd
(KSPL, a part of the Kissan group) continues to reflect the Kissan
group's weak financial risk profile, marked by high gearing and
weak debt protection metrics, small scale of operations, and large
working capital requirements.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL B/Stable (Reaffirmed)
The rating also factors in the susceptibility of the group's
operating margin to adverse changes in regulations on paddy and
rice prices. These rating weaknesses are partially offset by the
group's integrated nature of operations, the partners' extensive
industry experience, and the financial support it gets from the
partners.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of Kissan Industries (KI) and Kissan
Solvex Pvt Ltd (KSPL), together referred to as the Kissan group.
This is because both entities have a common promoters and
management and derive considerable operational and business
synergies from each other.
Outlook: Stable
CRISIL believes that the Kissan group will continue to benefit
over the medium term from its established relationships with its
customers. The outlook may be revised to 'Positive' if the group's
financial risk profile improves, most likely driven by improvement
in operating margin and cash accruals or benefits from significant
capital infusion by the partners, leading to improvement in its
capital structure, or if its working capital management improves.
Conversely, the outlook may be revised to 'Negative' if its
working capital requirements are larger than expected or its
profitability is lower than expected or if its large debt-funded
capital expenditure leads to further weakening in its financial
risk profile.
The Kissan group, promoted by Mr. Indrajeet Singh of Jalalabad
(Punjab), manufactures rice, rice bran oil, and de-oiled cakes.
KI was set up in 1996 as a partnership firm by Mr. Indrajeet Singh
and his mother Mrs. Manjeet Kaur. Earlier, it operated under the
name Kissan Rice Mill since 1975. The firm is engaged in
processing rice from paddy. KI has a facility in Jalalabad with
installed milling capacity of 2 tonnes per hour (tph). The firm
processes 1121 variety of basmati rice, which account for the
major proportion of its revenue. It also manufactures parmal
variety of non-basmati rice.
KSPL was incorporated in 1992 with an intention to forward
integrate the operations of KI with focus on manufacturing of rice
bran oil and de-oiled cake. The company also has a unit in
Jalalabad with capacity of 250 tonnes per day (tpd). The
proportion to total revenue varies on a year-on-year basis; over
90 per cent of the company's revenue came from sales of rice bran
oil and remaining from de-oiled cake. The company also trades in
other edible oil in small proportion.
MAHESH GINNING: CRISIL Reaffirms 'B+' Rating on INR60MM Loan
-------------------------------------------------------------
CRISIL's rating on the bank loan facility of Mahesh Ginning
Pressing & Oil Industries continues to reflect Mahesh Ginning's
weak financial risk profile marked by small net worth, moderate
gearing, and weak debt protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 60 CRISIL B+/Stable (Reaffirmed)
The rating also reflects the firm's small scale of operations in
the intensely competitive cotton ginning industry and the
vulnerability of its business risk profile to changes in
government policy. These rating weaknesses are partially offset by
the extensive industry experience of Mahesh Ginning's promoters
and its proximity to the cotton growing belt in Gujarat.
Outlook: Stable
CRISIL believes that Mahesh Ginning will continue to benefit over
the medium term from its promoters' industry experience. The
outlook may be revised to 'Positive' if the firm significantly
scales up operations while sustaining its margins, and if its
capital structure improves, most likely because of equity infusion
or substantial cash accruals. Conversely, the outlook may be
revised to 'Negative' if the firm's working capital requirements
stretch or if it undertakes any large debt-funded capital
expenditure programme, weakening its financial risk profile.
Mahesh Ginning, set up in 2007, undertakes cotton ginning activity
in Surendranagar (Gujarat). It is promoted by Mr. Prabhubhai
Bhoraniya; his son Mr. Nayankumar Bhoraniya currently manages the
firm's operations.
Mahesh Ginning's profit before tax (PBT) is estimated at INR0.86
million on net sales of INR295.8 million for 2013-14 (refers to
financial year, April 1 to March 31), against a PBT of INR2.3
million on net sales of INR293.8 million for 2012-13.
MYSORE FRUIT: CRISIL Suspends 'B' Rating on INR160.6MM Loans
------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Mysore
Fruit Products Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 70 CRISIL A4 Suspended
Cash Credit 10 CRISIL B/Stable Suspended
Packing Credit 55 CRISIL A4 Suspended
Proposed Long Term
Bank Loan Facility 135.6 CRISIL B/Stable Suspended
Term Loan 15 CRISIL B/Stable Suspended
The suspension of ratings is on account of non-cooperation by
MFPPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, MFPPL is yet to
provide adequate information to enable CRISIL to assess MFPPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'.
MFPPL was set up in 1957 by the Government of Karnataka; it was
acquired by Mr. D Adikesavulu in 1987. The company was
reconstituted as private limited company in 2005. It manufactures
fruit juice and pulp from mangoes, guavas, grapes, pomegranates,
and tomatoes, at its two processing units in Bengaluru, with
capacity of 13,500 tpa. Around 60 per cent of the company's
revenues come from the sale of juice and pulp of mango, and the
rest from the sale of juice and pulp of other fruits. MFPPL
derives about 90 per cent of its revenues from exports to
manufacturers of juices and aerated drinks in France, Russia, the
Middle East, and European countries.
N.S.K BUILDERS: CRISIL Assigns 'B' Rating to INR175MM Loans
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of N.S.K Builders Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 25 CRISIL B/Stable
Bank Loan Facility
Bank Guarantee 170 CRISIL A4
Cash Credit 150 CRISIL B/Stable
The ratings reflect NBPL's high working capital intensive nature
of operations, its tender based nature of operations and
vulnerability of its operating margins to fluctuations in prices
of input materials. These rating weaknesses are partially offset
by the extensive industry experience of promoters in the
construction industry and its moderate financial risk profile.
Outlook: Stable
CRISIL believes that NBPL will benefit over the medium term from
the long standing experience of its promoters in the construction
industry. The outlook may be revised to 'Positive', if NBPL's
working capital cycle improves marked by substantial reduction in
debtor days and an increase in its scale of operations and
operating profitability significantly over the medium term there
by leading to an overall improvement in its financial risk
profile. Conversely, the outlook may be revised to 'Negative', if
the company undertakes any significant debt-funded capital
expenditure or if its revenues and operating profitability decline
or if its working capital cycle elongates leading to deterioration
in its financial profile.
Formed in 1996 as a partnership entity, and later incorporated as
a private limited company in the year 2010, NBPL is involved in
civil construction for various large infrastructure projects like
roads and building construction. The company is being promoted by
Mr. NSK Kalairaja and Mr NSK Karunairaja.
For 2012-13 (refers to financial year, April 1 to March 31), NBPL
reported a PAT of INR 20.1 million on net sales of INR 538
million, against a PAT of INR 7.2 million on net sales of INR821
million for 2011-12.
NAMISON POWERTECH: CRISIL Suspends 'B-' Rating on INR30MM Loans
---------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Namison
Powertech Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 10 CRISIL A4 Suspended
Cash Credit 30 CRISIL B-/Stable Suspended
Letter of Credit 10 CRISIL A4 Suspended
The suspension of ratings is on account of non-cooperation by NPPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, NPPL is yet to
provide adequate information to enable CRISIL to assess NPPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'.
NPPL, incorporated in 2009, manufactures transformer cores from
imported cold-rolled grain oriented sheets and scraps. Its
facility is at Waghodia Industrial Estate in Vadodara (Gujarat).
The company is promoted and managed by Mr. Rajesh K Shah and his
wife, Mrs. Rupal R Shah.
PANORAMA APPARELS: CRISIL Suspends 'D' Rating on INR100.5MM Loans
-----------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Panorama Apparels India Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 0.5 CRISIL D Suspended
Cash Credit 20 CRISIL D Suspended
Export Packing Credit 40 CRISIL D Suspended
Working Capital Term 40 CRISIL D Suspended
Loan
The suspension of ratings is on account of non-cooperation by
Panorama with CRISIL's efforts to undertake a review of the
ratings outstanding. Despite repeated requests by CRISIL, Panorama
is yet to provide adequate information to enable CRISIL to assess
Panorama's ability to service its debt. The suspension reflects
CRISIL's inability to maintain a valid rating in the absence of
adequate information. CRISIL considers information availability
risk as a key credit factor in its rating process and non-sharing
of information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'.
Based in Tirupur (Tamil Nadu), Panorama manufactures ready-made
garments, and has a capacity of 2.19 million pieces per annum. The
company derives its revenues from exports to Europe. Panorama's
promoter-director, Mr. K Narendran, has an industry experience of
more than 30 years.
PAWANSUT CONSTRUCTION: CRISIL Puts B Rating on INR35MM Loans
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of Pawansut Construction.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 5 CRISIL B/Stable
Bank Loan Facility
Bank Guarantee 50 CRISIL A4
Cash Credit 30 CRISIL B/Stable
The ratings reflect PSC's below-average financial risk profile,
marked by a modest net worth, high gearing, and below-average debt
protection metrics. The ratings also factor in the firm's modest
scale of operations in the highly fragmented civil construction
industry and the geographical concentration in its revenues. These
rating weaknesses are partially offset by the extensive industry
experience of PSC's proprietor.
Outlook: Stable
CRISIL believes that PSC 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 significantly
better-than-expected cash accruals or substantial capital
infusion, along with efficient working capital management.
Conversely, the outlook may be revised to 'Negative' if the firm
reports lower-than-expected cash accruals, large working capital
requirements, or any unanticipated debt-funded capital
expenditure, leading to further weakening of its liquidity.
Established in 2008 and based in Ghazipur (Uttar Pradesh), PSC is
a proprietorship firm engaged in civil construction. The firm
undertakes construction of roads and bridges for government
departments in Bihar and is owned and managed by Mr. Abhishek
Kumar Singh.
PONNERI STEEL: CRISIL Suspends B+ Rating on INR186.8MM Loans
------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Ponneri
Steel Industries.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 180 CRISIL B+/Stable Suspended
Letter of Credit 50 CRISIL A4 Suspended
Term Loan 6.8 CRISIL B+/Stable Suspended
The suspension of ratings is on account of non-cooperation by PSI
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, PSI is yet to
provide adequate information to enable CRISIL to assess PSI's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'.
Set up in 1989 by Mr. Om Prakash Sharma as a partnership concern,
PSI manufactures Thermo mechanically treated (TMT)/Cold Twisted
bars (CTD), and has semi-integrated operations for manufacture of
mild steel (MS) ingots. The firm's rolling mill has installed
capacity of 150 tonnes per day (tpd) and the induction furnace has
a capacity of 100 tpd. PSI's manufacturing facilities are located
in Panjetti (Tamil Nadu).
POWER TECH: ICRA Lowers Rating on INR6.50cr Loan to 'D'
-------------------------------------------------------
ICRA has revised the long term rating assigned to the INR6.50
crore fund based limits of Power Tech to [ICRA]D from [ICRA]B-.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limits 6.50 [ICRA]D (revised from
[ICRA]B-)
The rating revision factors in irregularities in debt servicing by
Power Tech. As a result of substantial drop in the operating
income during FY 14 on account of weak order book, a portion of
cash credit limits were converted to working capital demand loan
by the lenders. There have been instances of delays in meeting the
repayment obligations of these loans which commenced from October
2013. As on 9th July 2014, instalment for the month of June 2014
was still unpaid.
Going forward, timely debt servicing by PT for at least three
months will be the key rating sensitive factor.
PT was initially setup as a proprietorship firm in the year 1999
by Mrs. L Suryakantham. The proprietorship was reconstituted as a
partnership firm in 2010 with the admission of Mr. Srinivasa Rao
as a partner. Since its inception, PT has been executing rate
contracts for piping works for the Ministry of Defence, Government
of India. Power Tech is a sister concern of the "Ultra" group of
companies which have interests in supply of valves and execution
of civil and electrical works for the Indian Navy under Ultra
Dimensions Private Limited (rated [ICRA]B). The group also
undertakes pipe fabrication works, annual contracts for ship
maintenance for the Navy etc.
PULIMOOTTIL SILKS: CRISIL Assigns B+ Rating to INR80MM Loans
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of Pulimoottil Silks Kottayam [PSK, part of the
Pulimoottil group].
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 37.5 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 42.5 CRISIL B+/Stable
The rating reflects the group's exposure to intense competition in
the apparel retail segment and its below-average financial risk
profile, marked by a high total outside liabilities to tangible
net worth (TOL/TNW) ratio and subdued interest coverage ratio.
These rating weaknesses are partially offset by the benefits that
the Pulimoottil group derives from its promoters' extensive
experience in the apparel retail industry.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of four entities: PSK, Pulimoottil
Garments ' Kottayam, Pulimoottil Silks ' Thrissur and Pulimootil
Silks and Apparels Pvt Ltd, together referred to as the
Pulimoottil group. This is because all the entities are in the
same line of business, have common promoters, share significant
business synergies, and have fungible cash flows between them.
Outlook: Stable
CRISIL believe that the Pulimoottil group will benefit from the
experience of its promoters in the apparel retail industry. The
outlook may be revised to 'Positive' in case the group
substantially scales up its operations, while maintaining its
profitability, resulting in improvement in its financial risk
profile. Conversely, the outlook may be revised to 'Negative' if
the group's working capital management deteriorates, thereby
impacting its liquidity, or if its financial risk profile
deteriorates, most likely because of delays in starting or
stabilising commercial operations at its upcoming showroom, or
additional debt-funded capex.
The Pulimoottil group consists of four entities, PSK and and
Pulimoottil Garments ' Kottayam, set up in 1986, Pulimoottil Silks
' Thrissur, set up in 2007 and Pulimootil Silks and Apparels Pvt
Ltd, set up in 2013 . The group is engaged in the retailing of
silk saris and readymade garments. The day-to-day operations of
the group are managed by Mr. Stephen Chacko, Mr. Abraham Chacko
and Mr. John Chacko.
The group reported a net profit of INR0.8 million on net sales of
INR513.2 million for 2012-13 (refers to financial year, April 1 to
March 31), as against a net profit of INR5.8 million on net sales
of INR651.5 million for 2011-12.
RAJARAJAN & SONS: CRISIL Suspends 'B' Rating on INR264.5MM Loans
----------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
Rajarajan & Sons.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 184.5 CRISIL B/Stable Suspended
Term Loan 80 CRISIL B/Stable Suspended
The suspension of ratings is on account of non-cooperation by RS
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, RS is yet to
provide adequate information to enable CRISIL to assess RS's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'.
Established in 2006 by Mr. K Rajarajan, RS is an authorised dealer
for M&M. The firm deals in M&M's passenger cars and utility
vehicles, sells spares and accessories, and services vehicles. It
has four showrooms ' One in Cuddalore, two in Villupuram (both in
TN) and one in Pondicherry. Vehicle sales contribute around 93 per
cent to RS's total revenues; the firm derives the remaining 7 per
cent from sales of spares and accessories, servicing, and
commission income.
R D GOLDEN: CRISIL Reaffirms 'B+' Rating on INR70MM Loan
--------------------------------------------------------
CRISIL's rating on the bank facilities of R D Golden Jewels Pvt
Ltd continues to reflect RDGJPL's below-average financial risk
profile marked by small net worth, high gearing, and weak debt
protection metrics. The rating also reflects RDGJPL's modest scale
of operations. These rating weaknesses are partially offset by the
extensive experience of RDGJPL's promoters in the gold jewellery
industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 70 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that RDGJPL will benefit from its promoters'
extensive experience in the gold jewellery industry over the
medium term. The outlook may be revised to 'Positive' in case of
significant improvement in scale of operations and better-than-
expected operating margin and net cash accruals. Conversely, the
outlook may be revised to 'Negative' in case of deterioration in
the company's liquidity because of large debt-funded working
capital requirements or low cash accruals.
Update
RDGJPL registered 20 per cent year-on-year decline in revenue to
INR191 million in 2013-14 (refers to financial year, April 1 to
March 31), mainly on account of lower demand because of
restrictions/duties imposed on gold. Despite the decline in
revenue, RDGJPL's cash accruals of around INR2.5 million in 2013-
14, were in line with CRISIL's expectation because of improved
operating margin. The operating margin improved to 8.1 per cent in
2013-14 from 2.6 per cent in 2012-13, driven by trading of high-
value products such as diamond-studded watches.
RDGJPL achieved sales of around INR20 million during the first two
months of 2014-15. Changes in the apex bank's policy towards gold
imports will remain a key rating sensitivity factor. While
operating margins are likely to fluctuate, CRISIL believes that
RDGJPL will maintain its business risk profile over the medium
term backed by its promoters' experience in the industry. .
RDGJPL's working capital management is moderate, as reflected in
estimated gross current assets (GCAs) of around 198 days as on
March 31, 2014. The high GCA days emanate from the company's large
inventory of around 181 days; the company follows the inventory
replenishment policy for hedging its gold inventory. It has
debtors of 20 to 25 days because of credit offered to customers.
As a result, its bank limits were fully utilised over the 12
months through May 2014. Consequently, its financial risk profile
remains below average, with gearing estimated at 4.1 times as on
March 31, 2014 (with unsecured loans from promoters treated as
neither debt nor equity as they are expected to remain in the
business and are subordinated to bank debt). While the company's
small net worth of INR18.5 million as on March 31, 2014 constrains
its financial flexibility, RDGJPL's liquidity is supported by
moderate unencumbered cash and bank balance of INR3.12 million to
be maintained on an average.
RDGJPL was established in Surat (Gujarat) in September 2012 by
Vaghani family. The company is engaged in retail trading and
manufacturing of gold ornaments. It has one showroom at Varachha
in Surat. The promoter family has experience of over 10 years in
the retail jewellery business.
RIGID HOSPITALS: CRISIL Suspends 'B' Rating on INR300MM Loan
------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of Rigid
Hospitals Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 300 CRISIL B/Stable Suspended
Bank Loan Facility
The suspension of ratings is on account of non-cooperation by
Rigid with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, Rigid is yet to
provide adequate information to enable CRISIL to assess Rigid's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'.
Incorporated in 1997, Rigid is based in Chennai (Tamil Nadu), and
operates hospitals under the Lifeline brand. Rigid has two
hospitals and four clinics in and around Chennai, with a total
capacity of 350 beds. Rigid specialises in gastroenterology and
bariatric, which contribute close to 70 per cent of the group's
turnover. Mr. J S Rajkumar, a surgeon and gastroenterologist, is
the chairman.
SALONA COTSPIN: CRISIL Suspends 'D' Rating on INR530MM Loans
------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Salona
Cotspin Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 12.4 CRISIL D Suspended
Bill Discounting 30 CRISIL D Suspended
Cash Credit 146.6 CRISIL D Suspended
Letter of Credit 29.3 CRISIL D Suspended
Overdraft Facility 75 CRISIL D Suspended
Term Loan 236.7 CRISIL D Suspended
The suspension of ratings is on account of non-cooperation by
Salona with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, Salona is yet to
provide adequate information to enable CRISIL to assess Salona's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
Salona was set up by Mr. Shyamlal Agarwal in 1994 in Erode (Tamil
Nadu). The company manufactures grey hosiery yarn in counts
ranging from 20s to 40s, and grey knit fabric. The company has
24,336 spindles and 8 knitting machines. It sells its products in
the Tirupur (Tamil Nadu) market. Direct exports contributed 15 to
20 per cent to Salona's total revenues in 2010-11 (refers to
financial year, April 1 to March 31).
SEVEN PILLARS: CRISIL Suspends 'B' Rating on INR80MM Bank Loan
--------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of Seven
Pillars Hospitality Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 80 CRISIL B/Stable Suspended
Bank Loan Facility
The suspension of ratings is on account of non-cooperation by
SPHPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SPHPL is yet to
provide adequate information to enable CRISIL to assess SPHPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'.
Incorporated in 2007, SPHPL is setting up a baking institute,
Assocom Institute of Baking Technology and Management, in Greater
Noida (Uttar Pradesh; [UP]). The total cost of the project is
estimated at INR 89.0 million, to be funded in a debt-to-equity
ratio of 2.3:1 (with a term loan of INR 62.5 million). The
institute will offer certificate and degree programmes in baking
and food safety and processing, and is expected to commence
operations in July 2013.
SHREE MAHAVIR: CRISIL Assigns 'D' Rating to INR85.8MM Loans
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL D/CRISIL D' ratings to the bank
facilities of Shree Mahavir Roll-Tech Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 32.8 CRISIL D
Bank Guarantee 3 CRISIL D
Cash Credit 50 CRISIL D
The ratings reflect instances of delay by SMRL in servicing its
debt; the delays have been caused by the company's weak liquidity,
driven by large working capital requirements and insufficient
accruals to meet debt obligations.
SMRL also has modest scale of operations in the highly competitive
steel industry and weak financial risk profile. However, it
benefits from its promoters' extensive industry experience.
Incorporated in 2010, SMRL is promoted by the Surat (Gujarat)-
based Mr. Vipul Shah and Mr. Pradeep Kumar Biravat. The company
manufactures thermo-mechanically treated bars; its production
facilities are in Surat.
For 2012-13 (refers to financial year, April 1 to March 31), SMRL
reported a loss of INR6.5 million on net sales of INR21.2 million.
SLO STEEL: CRISIL Suspends 'B' Rating on INR250MM Loan
------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
SLO Steel Industries Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 250 CRISIL B/Stable Suspended
Letter of Credit 150 CRISIL A4 Suspended
The suspension of ratings is on account of non-cooperation by
SLOSIL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SLOSIL is yet to
provide adequate information to enable CRISIL to assess SLOSIL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'.
Based in Chennai (Tamil Nadu), SLOSIL was established by Mr. Anil
Ojha, Mr. Arun Kumar Sharma, and Mr. Pratap Kumar Rakesh. SLOSIL
commenced commercial operations in April 2011. The company trades
in all varieties of iron and steel with specific emphasis on
structural steel. The promoters have been manufacturing and
trading in steel since the late 1990s and also manage other
entities, such as SLO Steels Ltd, which manufactures and trades in
structural steel, and SLO Industries Ltd, which manufactures
structural steel.
SRI DEVI: CRISIL Suspends 'B+' Rating on INR58.7MM Loans
--------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Sri Devi Enterprises.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 52 CRISIL B+/Stable Suspended
Long Term Loan 4.2 CRISIL B+/Stable Suspended
SME Credit 2.5 CRISIL B+/Stable Suspended
The suspension of ratings is on account of non-cooperation by SDE
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SDE is yet to
provide adequate information to enable CRISIL to assess SDE's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'.
Set up in 2009 as a partnership firm by Mr. M Venkateswara Rao and
his family members, SDE mills and processes paddy into rice, rice
bran, broken rice, and husk. It has an installed paddy milling
capacity of 5 tonnes per hour. The firm's rice mill is located in
Nellore (Andhra Pradesh).
SUNDER IMPEX: CRISIL Suspends 'B+' Rating on INR25MM Loan
---------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Sunder
Impex Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Foreign Bill Discounting 34 CRISIL A4 Suspended
Pre Shipment Credit 46 CRISIL A4 Suspended
Proposed Long Term Bank 25 CRISIL B+/Stable Suspended
Loan Facility
The suspension of ratings is on account of non-cooperation by SIPL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SIPL is yet to
provide adequate information to enable CRISIL to assess SIPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'.
SIPL was incorporated in 2005, promoted by Mr. Sushil Kumar Bansal
and his brother, Mr. Manish Kumar Bansal. The company manufactures
and exports stainless steel utensils, mainly tableware,
kitchenware, and bar accessories. It sells its products primarily
in Africa through agents based in Dubai. It has two manufacturing
facilities in Delhi, with combined capacity of about 150 tonnes
per month.
TATA STEEL: Fitch Assigns 'BB+' Rating on USD1BB Sr. Unsec. Notes
-----------------------------------------------------------------
Fitch Ratings has assigned Tata Steel Limited's (TSL; BB+/Stable)
USD500m 4.85% senior unsecured guaranteed notes due 2020 and
USD1bn 5.95% senior unsecured guaranteed notes due 2024 a final
rating of 'BB+'. The final rating follows the receipt of
documents conforming to information already received, and is in
line with the expected rating assigned on July 21, 2014.
The notes are issued by Singapore-based ABJA Investments Co Pte
Ltd, a wholly owned subsidiary of TSL, and unconditionally and
irrevocably guaranteed by India-based TSL. The notes are
therefore rated at the same level as TSL's foreign-currency senior
unsecured rating of 'BB+'.
Proceeds of the notes will be used to refinance the group's
offshore debt obligations and for general corporate purposes
outside India. The notes will rank pari passu with the TSL's
existing and future senior unsecured indebtedness.
KEY RATING DRIVERS
TSL's Financial Profile to Moderate: Fitch Ratings expects the
financial profile of TSL to moderate, with net leverage (net
adjusted debt/operating EBITDAR) to fall below 4x by the financial
year ending 31 March 2015 (FY15) (FY13:4.9x). Fitch expects TSL's
strong cash generation to support the deleveraging over the medium
term, driven by improved performance at both its European and
Indian operations.
TSL's EBITDA improved to INR164.1bn in FY14 from INR123.2bn a year
earlier, driven by higher Indian sales volumes and improved
profitability. Fitch expects both sales volume growth and
stronger profitability to be sustainable. The planned
commissioning of the first phase of its new plant at Odisha in
4QFY15 will also support stronger earnings. The first phase of
the new plant is expected to add 3 million tonnes per annum (mtpa)
of capacity.
Assets Sales Support Capex: TSL has undertaken measures to control
its rising debt levels. In March 2014, the company sold a land
parcel in Mumbai and in May 2014 sold its 50% stake in Dhamra Port
Company Limited. Fitch believes that the company is likely to
divest additional assets, if required, which will help fund its
capex and constrain TSL's debt levels. The company also now
expects to start major work on the second phase (3mtpa) of its new
Odisha plant following the commissioning and stabilization of the
first phase.
European Operations Rebound: Tata Steel UK Holdings Limited's
(TSUKH) profitability has risen over the last four quarters.
EBITDA was GBP314m in FY14, up from GBP89m in FY13. Fitch's
expectation of a sustained boost to TSUKH's profitability reflects
the modestly better market conditions for western European steel
producers, together with continued cost-rationalization and an
improving product mix.
Sound Indian Steel Market: Fitch expects steel demand in India to
strengthen in the next 12 months as investment picks up. The weak
economic environment in the past two years has affected the key
automobile, construction and engineering sectors. As a result,
steel prices softened, which narrowed the margins of producers
over 2012-2013.
Parent Group Support: TSL's ratings continue to benefit from a
one-notch uplift because of the potential support from the Tata
group due to TSL's strategic importance to the group.
RATING SENSITIVITIES
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- TSL's net financial leverage of more than 4x on a sustained
basis
-- Any weakening of linkages between TSL and the Tata group
Positive: Future developments that may, individually or
collectively, lead to positive rating action include:
-- Significant improvement in TSL's net financial leverage to
below 2.5x on a sustained basis, coupled with sustained
profitable operations at TSUKH would be positive for the
Foreign-Currency IDR.
UNITECH FABRICATORS: CRISIL Reaffirms B+ Rating on INR50MM Loan
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Unitech Fabricators &
Engineers Pvt Ltd continue to reflect UFEPL's weak financial risk
profile, marked by a modest net worth, below-average debt
protection metrics, and average gearing, and its working-capital-
intensive operations. These rating weaknesses are partially offset
by the extensive experience of the company's promoters in the
fabrication industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 50 CRISIL A4 (Reaffirmed)
Bill Discounting under 10 CRISIL A4 (Reaffirmed)
Letter of Credit
Cash Credit 50 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that UFEPL will continue to benefit over the
medium term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the company's net worth
improves significantly, most probably through equity infusion by
promoters or strong accretion to reserves resulting from
improvement in its scale of operations and profitability.
Conversely, the outlook may be revised to 'Negative' if UFEPL's
liquidity deteriorates, most likely because of delays in
receivables collection, or if its capital structure weakens due to
increased reliance on debt for funding substantial capital
expenditure and working capital requirements.
UFEPL, based in Howrah (West Bengal), was incorporated in 1998 and
promoted by Mr. Kamal Bhattacharjee. The company manufactures
cable trays and associated products such as earthing materials and
lighting poles. Cable trays are used for laying cables. UFEPL
markets the products mainly to engineering industries.
For 2013-14 (refers to financial year, April 1 to March 31),
UFEPL reported a profit after tax (PAT) of INR4 million on revenue
of INR317.5 million, against a PAT INR16 million on revenue of
INR357.9 million for 2012-13.
UTTAM FINE: CRISIL Assigns 'D' Rating to INR180MM Loans
-------------------------------------------------------
CRISIL has assigned its 'CRISIL D' rating to the long-term bank
facilities of Uttam Fine Tex Pvt Ltd. The rating reflects
instances of delay by UFTPL in servicing its debt; the delays have
been caused by the company's weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 15 CRISIL D
Cash Credit 55 CRISIL D
Proposed Long Term
Bank Loan Facility 110 CRISIL D
UFTPL also has a small-scale of operations and a weak financial
risk profile, marked by high gearing and weak debt protection
metrics. Furthermore, it is susceptible to risks related to
intense competition in the fragmented textile industry. However,
the company benefits from the extensive industry experience of its
promoters.
UFTPL was incorporated in 1998, promoted by Mr. Rajeev Nangalia.
The company, based in Surat (Gujarat), manufactures and trades in
grey and processed fabrics that are mainly used for making sarees
and dress materials.
VIGEL MANUFACTURING: CRISIL Suspends B- Rating on INR10MM Loan
--------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Vigel
Manufacturing Technologies Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 50 CRISIL A4 Suspended
Bill Discounting 10 CRISIL A4 Suspended
Cash Credit 10 CRISIL B-/Stable Suspended
The suspension of ratings is on account of non-cooperation by
VMTPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, VMTPL is yet to
provide adequate information to enable CRISIL to assess VMTPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL considers information availability risk as a
key credit factor in its rating process and non-sharing of
information as a first signal of possible credit distress, as
outlined in its criteria 'Information Availability Risk in Credit
Ratings'
VMTPL, incorporated in 2005, is engaged in manufacturing and
supplying twin-spindle horizontal machine that are required in
machining of auto-components, predominantly for two-wheeler
manufacturers. Vigel SpA owns around 82 per cent of VMTPL's equity
shares. The Mehrotra family owns around 18 per cent of VMTPL's
shares in the company. The Indian operations are managed by Mr.
Abhay Mehrotra, who is the executive director of VMTPL. The
registered office of the company is in Mumbai and its
manufacturing facility is at Ranjangaon near Pune in Maharashtra.
=========
J A P A N
=========
SIGNUM VANGUARD: S&P Raises Rating on Class A 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 a collateral asset.
S&P has raised its rating to the level at which the tranche's SROC
level exceeds 100% and meets S&P's 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
Signum Vanguard Ltd.
Class A secured fixed rate credit-linked loan series 2005-04
To From Amount
BB (sf) BB- (sf)/Watch Pos JPY4.0 bil.
=================
S I N G A P O R E
=================
GCX LIMITED: Fitch Assigns 'BB+' Rating on USD350MM Sr. Notes
-------------------------------------------------------------
Fitch Ratings has assigned GCX Limited's USD350m 7% senior secured
notes due 2019 a final rating of 'BB+' and a Recovery Rating of
'RR1'. The final rating follows the receipt of documents
conforming to information already received, and is in line with
the expected rating assigned on 14 July 2014. GCX Limited is a
wholly owned subsidiary of Global Cloud Xchange Limited (GCX;
B+/Stable).
GCX's notes are secured by the assets and equity interests of GCX
and its key subsidiaries, and guaranteed by GCX and its key
operating subsidiaries. The note proceeds will be used to fully
repay its existing USD250m shareholder loan from its immediate
parent, Reliance Globalcom B.V (RGBV), ultimately owned by
Reliance Communications Limited (Rcom), India's fourth-largest
telecom service provider by revenue market share.
Part of the proceeds will also be used, together with a working
capital bank loan, to finance capex related to its submarine cable
networks. GCX's debt will now comprise of the USD350m notes, a
proposed USD30m working capital loan and capital leases of USD45m.
KEY RATING DRIVERS
High Entry Barriers: GCX's ratings factor in its position as the
owner of one of the world's largest private undersea cable
systems, with 68,698km of cables and a 83,432km terrestrial cable
network. There are significant barriers to entry for potential
competitors. These include high capital intensity, long lead
times to build undersea cables, limited availability of rights of
way, and complex and lengthy processes - both regulatory and
commercial -- before revenue can be achieved.
Industry Oversupply: Fitch Ratings expects GCX's operating EBITDAR
margin to be around 25%-27% during the financial year ending March
2015 (FY15) through to FY17 (FY14: 27%) due to tariff declines as
the industry remains oversupplied and intensely competitive.
Industry capacity gains should consistently outpace fast-growing
data demand as newer technologies allow for significant capacity
upgrades. Fierce competition could also hit GCX's "indefeasible
rights of usage" (IRU) sales, hurting liquidity and cash
generation.
Strong Revenue and Cash Visibility: As at end-March 2014, GCX had
about USD912m (1.8x of FY14 revenue) in contracted revenue to be
recognized in the next three years. GCX has high revenue
visibility because over 80% of its revenue is recurring in nature,
backed by medium- to long-term contracts with its customers.
However, there is a risk of lower profitability with new customer
contracts in the future because the undersea cable business
typically faces double-digit percentage price erosion each year,
and existing customers could switch to a lower-priced network
service provider at the time of contract renewal.
Generally Positive FCF: The Stable Outlook on GCX's ratings
reflects its ability to generate positive free cash flows (FCF).
Fitch expects GCX to generate FCF of around USD10m-20m after capex
of around USD50-60m each year during FY15-18, except in FY16 when
it plans to increase its capex to USD100m to build two new
undersea cables - India-Singapore and Tokyo-Seattle. Fitch
forecasts GCX to generate annual EBITDA of around USD130m during
FY15-16.
Related Party Transactions: Fitch rates GCX on a standalone basis,
as we believe that GCX has weak legal, operational and financial
linkages with its ultimate parent, Rcom. The agency also believes
that cash flows are ring-fenced within the GCX group by the
restrictive dividend and asset-sale covenants in its USD350m
senior secured note documents, which limit GCX's ability to pay
cash to the parent. Furthermore, the parent's plan to dispose of
50% of its stake in GCX and the presence of a new management team
is likely to result in GCX operating as an independent entity.
GCX was incorporated in March 2014, combining three entities: Flag
Telecom (undersea cable business), Yipes Inc (ethernet services)
and Vanco (managed services). Prior to restructuring, the group
had significant related-party transactions, mostly with its
immediate parent RGBV and ultimate parent Rcom. However, most of
the related-party balances have been netted off during the course
of restructuring (balance USD250m, to be settled via the bond
proceeds), and new management is in place to run the group
independently of its parent.
Better Leverage; Small Size: GCX's FY15 forecast funds flow from
operations (FFO)-adjusted net leverage of 3.5x is better than
similarly rated peers mainly because it is forecast to pay lower
dividends compared with its peers and due to its ability to
generate positive FCF. Compared with GCX, Level 3 Communications
Inc (B+/Stable) and Pacnet Limited (B/Stable) are likely to have
higher leverage at 5.0x and 4.0x in 2014 respectively. Pacnet is
of the same size as GCX while GCX's size and scale are much
smaller than Level 3's (FFO of over USD1bn) with an average
estimated FFO for FY15-16 of below USD100m.
Adequate Recovery on Proposed Bond: Fitch has assigned a 'BB+' and
'RR1' rating, three notches above the IDR, on the newly issued
USD350m 7% senior secured guaranteed bond. The bond is guaranteed
by all the key operating companies, which generate most of group
revenue and EBITDA. The 'RR1' Recovery Rating reflects our
calculations of at least a 91% recovery in a stressed situation -
based on our assessment of the distressed going-concern enterprise
value of GCX's cable networks.
RATING SENSITIVITIES
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- Sustained negative FCF generation
-- A deterioration in the operating environment and/or
evidence of the parent accessing cash from GCX and
negatively affecting GCX's credit profile resulting
in FFO-adjusted net leverage rising to over 4.0x
(FY15-16 forecast: 3.5x).
-- FFO interest charge coverage falling below 3.0x, both on a
sustained basis. (FY15 forecast: 3.2x).
-- A downgrade could also result if judgement in outstanding
litigation in France requires GCX to pay USD82m of taxes.
Positive: Although an upgrade is unlikely in the next 12-18
months, future developments that may, individually or
collectively, lead to positive rating action include:
-- Consistent generation of positive FCF.
-- A substantial increase in scale and absolute EBITDA
generation.
-- FFO-adjusted net leverage falling below 2.5x on a sustained
basis.
================
S R I L A N K A
================
CEYLON DOLLAR: Fitch Puts 'BB-' Fund Credit Rating on Bond Fund
---------------------------------------------------------------
Fitch Ratings has assigned the newly organized Ceylon Dollar Bond
Fund a 'BB-' Fund Credit Rating and 'V-5' Fund Volatility Rating.
This is the first time Fitch has assigned international fund
ratings to a Sri Lanka based bond fund. The fund only invests in
US dollar-denominated bonds issued by the Sri Lankan sovereign,
licensed banks and corporate issuers. The fund is managed by
Ceylon Asset Management (CAM). The fund manager expects to launch
the fund on July 30, 2014.
KEY RATING DRIVERS
The 'BB-' Fund Credit Rating is driven by the weighted average
rating factor (WARF) and rating distribution based on the expected
composition of the fund and the fund's investment guidelines. The
fund will have limited investment space as it will only invest in
US dollar bonds issued by the Government of Sri Lanka, licensed
banks in Sri Lanka and Sri Lankan corporate that are rated by an
international rating agency. This limits the current investment
space to 11 issuances totaling just over USD7bn. CAM expects the
fund to reach USD10m within six months of inception. Fitch will
review the fund after six months to see if the fund has achieved
an appropriate level of diversification, consistent with its
target portfolio and investment guidelines as indicated by the
manager.
Fitch has capped the fund's rating at the level of the Sri Lanka
sovereign (BB-/Stable) given its expected material exposure to Sri
Lankan government securities.
ASSET CREDIT QUALITY
The fund's target portfolio comprises bonds rated 'BB-' or lower
issued by the entities detailed above. The fund will invest up to
10% of assets in fixed US dollar deposits in a licensed commercial
bank in Sri Lanka.
CONCENTRATION
As a result of the limited investment space, Fitch expects the
fund to be moderately concentrated. Consistent with its rating
criteria, Fitch has therefore conducted stress tests on the
expected portfolio. Based on its analysis, Fitch believes the
fund has a limited capacity to withstand negative rating migration
before it would be downgraded to the 'B' category.
LIQUIDITY
The fund will invest in instruments with relatively long maturity
(WAL of 4.62 years in the target portfolio) except for an
allocation of up to 10% to three-month deposits. Therefore the
fund will be reliant on secondary market liquidity to service
large redemption requests. However, the fund has access to an
overdraft facility of 10% and requires 14 days notice on
redemptions above 3% of the fund. On the asset side, it will only
hold a limited proportion of outstanding debt issues, all of which
will be listed on the Singapore Exchange.
PORTFOLIO SENSITIVITY TO MARKET RISK
The Volatility Rating of 'V-5' reflects the target portfolio's
relatively long WAL and a market risk factor (MRF) of 14.20.
Fitch's calculation of the fund's MRF incorporates a weighting to
take into account the volatility expected in lower-rated emerging
market debt. According to Fitch's criteria, funds rated 'V-5' are
considered to have high sensitivity to market risk. On a relative
basis, total returns and/or changes in net asset value are
expected to experience substantial variability across a range of
market scenarios due to substantial exposure to interest rates,
credit spreads and other risk factors.
FUND PROFILE
The fund will regulated by the Securities and Exchange Commission
of Sri Lanka under the Unit Trust Code, 2011. The fund's trustee
is Deutsche Bank Sri Lanka, a branch of Deutsche Bank AG
(A+/NegativeF1+).
THE ADVISOR
Fitch considers CAM suitably qualified, competent and capable of
managing the fund. The investment committee has relevant
experience and the company has sufficient sources of information
on which to base its decision-making process. Fitch considers the
systems supporting the fund's investment activities satisfactory.
CAM is 22.5%-owned by Sri Lanka Insurance Corporation Ltd (SLIC,
AA(lka)/Stable), 67.5% by Ceylon Capital Trust (Pvt) Ltd and 10%
by Commercial Credit and Finance PLC (CCF). Fitch believes it has
support from shareholders. However, a key challenge facing the
business will be to demonstrate sustained growth in assets under
management. The new fund is a key component of its growth
strategy. CAM has been in existence and managing funds since
1999. The current management team has been in place since 2005
and SLIC and CCF invested in the business in 2010 and 2013,
respectively.
RATING SENSITIVITIES
The ratings may be sensitive to material changes in the credit
quality or market risk profile of the fund. A weakening in the
liquidity inherent in the fund and or changes to liquidity
provisions such as the manager's ability to borrow against the net
assets of the fund or its ability to delay redemptions would be
viewed as negative. Changes in exchange control regulations which
could adversely impact the fund leading to transfer and
convertibility risks would also be viewed as negative.
Upside potential for the fund rating is constrained by Sri Lanka's
sovereign ratings.
To maintain the bond fund ratings CAM will provide Fitch with
portfolio information, including details of the portfolio's
holdings and credit quality. Fitch closely monitors the credit
composition of the portfolio, the credit counterparties used by
the manager and the overall market risk profile of the
investments.
=============
V I E T N A M
=============
VIETNAM: Moody's Hikes Issuer & Sr. Unsecured Bond Ratings to B1
----------------------------------------------------------------
Moody's Investors Service has upgraded the issuer and senior
unsecured bond ratings of the Government of Vietnam by one notch
to B1 from B2. The outlook is stable.
The key drivers of the rating action are as follows:
1) An emerging track record of macroeconomic stability
2) A strengthening in the balance of payments and external
payments position
3) An easing in the contingent risks from the banking sector
Concurrently, Moody's has raised Vietnam's long-term foreign
currency (FC) bond ceiling to Ba2 from B1, as well as its long-
term FC deposit ceiling to B2 from B3. In addition, Moody's has
maintained the short-term FC bond and deposit ceilings at "Not
Prime.''
These ceilings act as a cap on the ratings that can be assigned to
the FC obligations of other entities domiciled in the country.
Moody's has also raised Vietnam's local currency (LC) country risk
ceiling to Ba1 from Ba2.
Ratings Rationale
Rationale For The Upgrade
First driver: Vietnam is in the midst of its third consecutive
year of broad macroeconomic stability. Although economic growth
has fallen since 2012, as compared to the preceding decade, the
economy has been characterized by price stability.
Real GDP growth averaged 5.3% year-on-year between 2012 and the
first half of 2014, lower than the average of 6.8% between 2002
and 2011. At the same time, inflation stayed under 7.5% year-on-
year for 26 consecutive months through July 2014, the longest time
it has remained under this level since at least 2000.
Growth over the past two years has declined from its historical
trend, but remains strong when compared with rating peers. Much of
the growth slowdown has been driven by weak domestic demand and a
lackluster expansion of domestic credit. In contrast, the export-
oriented, foreign-owned sector of the economy has remained robust,
helping to sustain overall economic activity.
Second driver: The strengthening of the balance of payments and
external payments position has been underpinned by a
diversification in the structure of Vietnam's exports towards more
capital-intensive manufactured goods, such as mobile phones and
electronics, and away from commodities and traditional labor-
intensive products, such as textiles and shoes. Vietnam is
becoming a more important node in regional cross-border production
networks for electronic goods.
Combined with relatively weak imports, this situation has resulted
in the current account shifting from a deficit to a healthy
surplus. In turn, this development has contributed to the
accumulation of foreign exchange reserves to an all-time high of
$35.9 billion, as of April 2014, as well as the stability of the
exchange rate.
Nevertheless, Vietnam's balance of payments remains susceptible to
capital flows and leakages, as represented by relatively large
errors and omissions in its balance of payments.
Third driver: The operating environment for the banking system has
stabilized, and risks to the government's balance sheet will
likely remain limited. Nevertheless, the overhang from a decade-
long credit boom--as manifested in the still large stock of non-
performing loans (NPLs)-- continues to constrain the banking
sector, undermining its ability and willingness to intermediate
credit.
In the context of macroeconomic deleveraging, the stock of
domestic credit fell to 108.2% of GDP in 2013 from a peak of
124.7% in 2010. Liquidity conditions have improved, reducing the
scale of interbank lending and the degree of interconnectedness in
the system. Consequently, contingent risks to the government have
eased, but have not been entirely eliminated.
Rationale For The Stable Outlook
The stable outlook for the B1 rating reflects the expectation of
continued macroeconomic stability, which, in turn, would further
support the restructuring of the banking system and augment the
country's external payments position.
What Could Change The Rating Up/Down
Further upward pressure on the rating could result from the
following: an improvement in the intrinsic financial strength of
the banking system and the state-owned enterprise (SOE) sector
that significantly diminishes contingent risks to the government;
fiscal consolidation that reduces deficits and places Vietnam's
fiscal profile in line with higher-rated peers; and a further re-
profiling of government debt that mitigates foreign exchange
risks.
Vietnam's sovereign credit profile is still marked by important
challenges. Capital levels in the banking system remain
inadequate, especially in the context of the continued weakness in
asset quality.
At the same time, risks from the SOE sector persist, posing
important constraints to the improving health of the banking
system and domestic demand. In addition, the government's fiscal
position has eroded over the past few years, driven by weaker
revenue performance.
The re-emergence of macroeconomic instability -- which leads to a
substantial deterioration in fiscal/debt metrics, a rise in debt-
servicing costs, and/or an erosion of the country's external
payments position -- could exert downward pressure on the rating.
In addition, the crystallization of contingent risks from either
the banking system or the SOE sector would be credit negative.
GDP per capita (PPP basis, US$): 4,012 (2013 Actual) (also known
as Per Capita Income)
Real GDP growth (% change): 5.4% (2013 Actual) (also known as GDP
Growth)
Inflation Rate (CPI, % change Dec/Dec): 6% (2013 Actual)
Gen. Gov. Financial Balance/GDP: -5.4% (2013 Actual) (also known
as Fiscal Balance)
Current Account Balance/GDP: 5.5% (2013 Actual) (also known as
External Balance)
External debt/GDP: 37.0% (2013 Actual)
Level of economic development: Low level of economic resilience
Default history: At least one default event (on bonds and/or
loans) has been recorded since 1983.
On July 23, 2014, a rating committee was called to discuss the
rating of the Vietnam, Government of. The main points raised
during the discussion were: The issuer's economic fundamentals,
including its economic strength, have materially increased. The
issuer's institutional strength/framework, have materially
increased. The issuer has become less susceptible to event risks.
An analysis of this issuer, relative to its peers, indicates that
a repositioning of its rating would be appropriate.
The principal methodology used in this rating was Sovereign Bond
Ratings published in September 2013.
The weighting of all rating factors is described in the
methodology used in this rating action, if applicable.
*********
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 ***