/raid1/www/Hosts/bankrupt/TCRAP_Public/140818.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, August 18, 2014, Vol. 17, No. 162
Headlines
A U S T R A L I A
G. & K. KIRITSIS: Heard Phillips Appointed as Receivers
MACQUARIE CAPITAL: Fitch Affirms BB+ Preferred Securities Rating
ONSITE RENTAL: Moody's Assigns B1 Corporate Family Rating
SHANDONG TIANYE: Placed in Receivership
C H I N A
BEIJING CAPITAL: Moody's Says Lower Revenue No Impact on Ba2 CFR
GREENTOWN CHINA: S&P Puts 'BB-' CCR on CreditWatch Negative
LONKING HOLDINGS: Moody's Withdraws B1 Corporate Family Rating
I N D I A
AMARJYOTI DALL: CARE Revises Rating on INR7.50cr Loans to 'D'
AMR GLOBAL: CRISIL Reaffirms 'D' Rating on INR190MM Loans
ATHENA EDUCATIONAL: CRISIL Assigns 'D' Rating to INR84MM Loans
BENGAL SHELTER: CRISIL Suspends 'D' Rating on INR2.01BB Loans
CACHE FURNITURE: CRISIL Reaffirms 'D' Rating on INR305MM Loans
CHANDRAKONA COLD: CRISIL Reaffirms 'D' Rating on INR84.6MM Loans
DEV COTTON: CARE Assigns 'B+' Rating to INR15.34cr Bank Loan
DINESH DAS: CRISIL Lowers Rating on INR60MM Loans to 'D'
ELLORA CONSTRUCTION: CRISIL Cuts Rating on INR142.7MML Loans to D
GEE PEE: CRISIL Suspends 'D' Rating on INR250MM Loan
HOTEL RUMANI: CARE Assigns 'D' Rating to INR6.24cr Bank Loan
IMAGE BROADCASTING: CRISIL Cuts Rating on INR300MM Loans to 'D'
JESSOP AND CO: CRISIL Reaffirms 'D' Rating on INR1.30BB Loans
KRISHNA GODAVARI: CRISIL Cuts Rating on INR1.02BB Loan to 'D'
MATRIX GLOBAL: CRISIL Cuts Rating on INR150MM Loans to 'D'
MAYA RETAIL: CRISIL Cuts Rating on INR98.7MM Loans to 'D'
NIMITAYA HOTEL: CRISIL Suspends 'C' Rating on INR980MM Loan
PATDIAM JEWELLERY: CRISIL Reaffirms 'D' Rating on INR220MM Loans
PM SHAH: CARE Reaffirms 'B+' Rating on INR5cr Bank Loan
PRAGATI MARINE: CRISIL Assigns 'D' Rating to INR70MM Loans
PUNJ LLOYD: CARE Cuts Rating on INR13,725.98cr Loans to 'D'
R H AGRO: CRISIL Downgrades Rating on INR1.52BB Loans to 'D'
REXON STRIPS: CRISIL Suspends 'D' Rating on INR318MM Loans
S.R. STEELS: CRISIL Suspends 'D' Rating on INR170MM Loans
SCAN STEELS: CARE Assigns 'B+(FD)' Rating to INR10.29cr Loan
SECUNDERABAD HOTELS: CRISIL Suspends 'D' Rating on INR300MM Loans
SHANKAR SOYA: CARE Reaffirms 'B' Rating on INR6.14cr Bank Loan
SHRI BIHARIJI: CARE Assigns 'B' Rating to INR63.72cr Bank Loan
SHRI KRISHNA: CARE Revises Rating on INR10.50cr Loan to 'B+'
SPICEJET LIMITED: Auditors Raise Going Concern Doubt
SRI VIJAYABHERI: CRISIL Reaffirms 'D' Rating on INR276.7 Loans
I N D O N E S I A
BERAU COAL: Moody's Downgrades Corporate Family Rating to B2
N E W Z E A L A N D
HANOVER FINANCE: Hotchin Loses Appeal Over Decision
NELSON BUILDING: Fitch Affirms 'BB+ LT Issuer Default Rating
WAIRARAPA BUILDING: Fitch Affirms 'BB+' LT Issuer Default Rating
- - - - -
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A U S T R A L I A
=================
G. & K. KIRITSIS: Heard Phillips Appointed as Receivers
-------------------------------------------------------
Anthony Phillips -- anthony@heardphillips.com.au -- and Mark
Lieberenz -- mark@heardphillips.com.au -- of Heard Phillips were
appointed as receivers of G. & K. Kiritsis & Co. Pty. Ltd, trading
as Ray White Real Estate Mile End, on Aug. 13, 2014.
A first meeting of the creditors of the Company will be held at
Heard Phillips, Level 1, 50 Pirie Street, in Adelaide, on
Aug. 22, 2014, at 11:00 a.m.
MACQUARIE CAPITAL: Fitch Affirms BB+ Preferred Securities Rating
-----------------------------------------------------------------
Fitch Ratings has affirmed the ratings of Macquarie Group Limited
(MGL) and its Australian subsidiaries, Macquarie Bank Limited
(MBL), Macquarie Financial Holdings Limited (MFHL), and Macquarie
International Finance Limited (MIFL).
Key Rating Drivers - IDRs, VRs And Senior Debt
MBL's IDRs, VR and senior debt ratings reflect sound liquidity,
solid capitalisation, robust risk management and a diverse
business mix, offset by earnings volatility and a larger risk
appetite relative to Australian retail banks. MGL is the non-
operating holding company of the group and its IDRs, VR and senior
debt ratings are driven by similar factors. However, the ratings
are notched once from MBL's ratings to recognise a higher risk
profile due to its exposure to unregulated operations through
MFHL, a greater level of earnings volatility, again due to MFHL,
and lower standalone liquidity at the holding company.
The Stable Outlooks reflect Fitch's view that MBL's and MGL's
balance sheet strength and geographic diversity should allow them
to weather a likely modest deterioration in Australia's operating
environment over the next 12-18 months with limited business
impact.
Liquidity management is strong, helping to offset a reliance on
wholesale funding. The group requires all long-term assets to be
funded with long-term liabilities and to maintain a stress-
survival horizon in excess of 12 months with only limited impact
on franchise. This leaves MBL well positioned to meet Basel III
liquidity requirements when they are implemented. MGL held
AUD19.1bn of high quality liquid assets at 31 March 2014 (FYE14),
with AUD17.3bn of this held by MBL. Liquid assets are held by the
operating subsidiaries rather than the holding company.
The solid liquidity positions help to offset a higher level of
earnings volatility relative to other similarly rated retail
banks. The volatility emerges from the group's capital market
related businesses, and is particularly prevalent in MFHL. Stable
earnings streams such as fees and commissions from funds
management have increased since FY08; however, the market related
businesses are core to the group and mean earnings are likely to
remain somewhat volatile.
Ratings reflect Fitch's expectation that MGL and MBL will continue
to maintain solid capital positions to offset the group's risk
appetite. The group held a substantial surplus over regulatory
requirements at FYE14, while double leverage was low at 101%.
MBL's Fitch core capital ratio was 12.7% at FYE14. Basel III
capital and leverage requirements have already been met, well in
advance of full implementation.
MGL has a generally robust risk management framework which also
helps to offset the group's higher risk appetite relative to most
Australian retail banks. Recent strong growth, particularly in the
bank's Australian mortgage portfolio, could leave MBL susceptible
to a downturn in the Australian housing market, although
underwriting has generally been in line with industry averages.
Concentration risk is low in the loan portfolio, but is higher
amongst interbank exposures. The group also maintains sizeable
equity exposures - both trading and non-trading - relative to
domestic and international peers and its own capital base.
Rating Sensitivities - IDRs, VRs And Senior Debt
A material weakening of the capital and/or liquidity positions
would leave MGL and MBL susceptible to increased market volatility
and would likely result in a downgrade of both entities IDRs, VRs
and senior debt ratings. Serious reputational issues may also lead
to negative rating pressure. Upside rating potential is limited by
the earnings volatility inherent in some of the businesses of MGL
and MBL.
Key Rating Drivers And Sensitivities - Support Rating And Support
Rating Floor
MGL's Support Rating (SR) and Support Rating Floor (SRF) reflect
Fitch's view that support from Australian authorities cannot be
relied upon if needed. The agency believes that if support were
provided to the group it would most likely be through the
regulated bank, MBL. MBL's SR and SRF reflect a moderate
probability of support given its position as the fifth largest
bank by total assets in Australia and a key player in the domestic
financial markets.
The SRs and SRFs of MGL and MBL are sensitive to any change in
assumptions around the propensity or ability of Australian
authorities to provide timely support. No change to the propensity
of the authorities to provide support appears imminent despite
global moves, although Australia's membership of the G20 could
mean some lessening of support in the medium- to long-term.
Key Rating Drivers And Sensitivities - Subordinated Debt And Other
Hybrid Securities
The ratings of MBL's and MGL's subordinated debt and Tier 1
capital securities are consistent with Fitch's criteria "Assessing
and Rating Bank Subordinated and Hybrid Securities", dated 31
January 2014. MBL's subordinated debt is notched once from the
banks' VR, while the Tier 1 capital securities of MGL and MBL are
notched five times from the respective VRs to reflect fully
discretionary coupon payments. The ratings of the instruments are
sensitive to the same factors that influence the VRs of MGL and
MBL.
Key Rating Drivers And Sensitivities - MFHL and MIFL
MFHL is a core subsidiary of MGL, undertaking the group's non-
banking activities. Its IDRs are aligned with those of MGL. MIFL
is a strategically important subsidiary of MBL, providing finance
to Macquarie entities. Its IDRs are notched once from those of
MBL.
Any change in the propensity and/or ability of the respective
parents to provide support to MFHL and MIFL is likely to result in
changes to each entity's IDRs and Support Rating.
The rating actions are as follows:
Macquarie Group Limited (MGL):
- Long-Term IDR: affirmed at 'A-'; Outlook Stable;
- Short-Term IDR: affirmed at 'F2';
- Viability Rating: affirmed at 'a-';
- Support Rating: affirmed at '5;
- Support Rating Floor: affirmed at 'No Floor';
- Senior unsecured debt: affirmed at 'A-'; and
- Short-term debt: affirmed at 'F2'.
Macquarie PMI LLC:
- Macquarie preferred membership interests (XS0562354422):
affirmed at 'BB'.
Macquarie Bank Limited (MBL):
- Long-Term IDR: affirmed at 'A'; Outlook Stable;
- Short-Term IDR: affirmed at 'F1';
- Viability Rating: affirmed at 'a';
- Support Rating: affirmed at '3';
- Support Rating Floor: affirmed at 'BB';
- Senior unsecured debt: affirmed at 'A';
- Short-term debt: affirmed at 'F1';
- Subordinated debt: affirmed at 'A-'; and
- Macquarie bank exchangeable capital securities (XS0763122909):
affirmed at 'BB+'.
Macquarie Capital Funding L.P.:
- Macquarie income preferred securities (XS0201559811): affirmed
at 'BB+'.
Macquarie Financial Holdings Limited (MFHL):
- Long-Term IDR: affirmed at 'A-'; Outlook Stable;
- Short-Term IDR: affirmed at 'F2'; and
- Support Rating: affirmed at '1'.
Macquarie International Finance Limited (MIFL):
- Long-Term IDR: affirmed at 'A-'; Outlook Stable;
- Short-Term IDR: affirmed at 'F2'; and
- Support Rating: affirmed at '1'.
ONSITE RENTAL: Moody's Assigns B1 Corporate Family Rating
---------------------------------------------------------
Moody's Investors Service has assigned a definitive B1 corporate
family rating (CFR) to Onsite Rental Group Pty Ltd, an Australian
equipment rental company with a national network across Australia.
At the same time, Moody's has assigned a definitive B1 senior
secured rating to the USD Term Loan and Revolving Facilities
entered into by Onsite Rental Group Operations Pty Ltd and Onsite
US Finco LLC, both wholly owned subsidiaries of Onsite.
The debt rated are:
USD320 million Senior Secured Term Loan B Facility due 31 July
2021
AUD40 million Revolving Credit Facility due 31 July 2019
The proceeds of the issuance will be used principally to repay
existing indebtedness of around AUD260 million, provide working
capital as well as to fund a special distribution to shareholders.
These definitive ratings follow the provisional ratings assigned
on 15 July 2014.
Ratings Rationale
"Onsite's B1 ratings reflect the inherent cyclical nature of the
equipment rental industry, which is in turn exposed to the level
of construction activity in the economy. Although the company has
achieved robust revenue growth in recent years, on the back of
material investment into its equipment fleet, it is expected to
face headwinds in maintaining its strong growth as domestic
construction activities slow," says Spencer Ng, a Moody's Vice
President and Senior Analyst.
At the same time, the B1 rating reflects its high financial
leverage and evolving capital structure.
"We expect financial leverage -- as measured by the ratio of
adjusted debt to EBITDA (on a Moody's adjusted basis) -- to be
around the low- to mid- 3x range immediately following the revised
refinancing transaction. This gives the company reasonable
financial headroom relative to the financial drivers set for its
B1 rating," adds Ng.
"Despite the challenging market conditions, we expect Onsite's
revenue profile to exhibit some resilience based on its
established clientele, diversified asset fleet as well as the
solid growth it has achieved over the past five years," says Ng.
In particular, Onsite's ability to mobilize its equipment fleet to
take advantage of rental opportunities in different markets is
vital to the company's capacity to preserve it revenue in a
cyclical downturn, especially when a significant portion of its
revenue is currently derived from contruction, production and
maintenance activities in the resources and commodities sector.
Onsite's equipment fleet is reasonably diversified across site-
accommodation, access, power equipments, earthmoving and
compaction vehicles as well as industrial tools.
"Over the long term, we expect the company's long-term financial
profile will be driven by the return expectations of its
shareholder. We expect Onsite's financial strategy to favor
shareholder-friendly initiatives within the confines of the loan
documents and financial leverage to remain high over time through
re-capitalizations similar to the proposed transaction,
notwithstanding this is the first return of capital to shareholder
since its acquisition in 2007," says Ng.
"Finally, as Next Capital is not considered as a natural long term
owner of Onsite, a changes in ownership - when Next Capital
decides to exit its investment - could also result in a step
change from its current financial profile," adds Ng.
The principal methodology used in these ratings was Global
Equipment and Automobile Rental Industry published in December
2010.
Onsite is an Australian equipment rental company with an equipment
fleet of around AUD295 million (book value) and a national network
of 34 branches. Onsite also has a small retail exposure through
its fully owned subsidiary Redstar Equipment. A large majority of
Onsite's shares are held by funds and equity interests managed by
Next Capital, with the remainder held by management and related
parties.
SHANDONG TIANYE: Placed in Receivership
---------------------------------------
Bradley Tonks -- btonks@pkflawler.com.au -- and John Vouris --
jvouris@pkflawler.com.au -- of PKF Lawler were appointed as
receivers of Shandong Tianye Australia Limited on Aug. 11, 2014.
A first meeting of the creditors of the Company will be held at
the offices of PKF Lawler, Level 9, 1 O'Connell Street, in Sydney,
on Aug. 21, 2014, at 2:00 p.m.
=========
C H I N A
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BEIJING CAPITAL: Moody's Says Lower Revenue No Impact on Ba2 CFR
----------------------------------------------------------------
Moody's Investors Service says that Beijing Capital Land Limited's
(BJCL) Ba2 corporate family rating and stable outlook are
unaffected by its reported lower revenue and EBITDA in 1H 2014.
Moody's points out that BJCL's Ba2 rating includes a one-notch
uplift, due to Moody's assessment of support that BJCL is likely
to receive from its parent, Beijing Capital Group Ltd (unrated),
in times of need.
BJCL's revenue for 1H 2014 totaled RMB4.5 billion, compared with
RMB4.9 billion in 1H 2013. Its EBITDA totaled RMB900 million
versus RMB1.2 billion in the same periods.
"BJCL's fall in revenue is partly due to its disposal of an equity
interest in a commercial project in Beijing, as well as primary
land development projects, as investment income rather than
including it as revenue," says Kaven Tsang, a Moody's Vice
President and Senior Analyst.
If the gains from the sale of its equity interests were added to
its EBITDA for 1H 2014, BJCL's EBITDA would have improved 33%
year-on-year to RMB1.6 billion, and its EBITDA/interest --
adjusted for the gains -- for the 12 months to 1H 2014 would have
improved slightly to 1.9x from 1.8x in 2013. Such a level of
interest coverage is in line with Moody's expectation.
Moody's expects BJCL's EBITDA/interest will improve to around 2x
by end-2014, as the company plans to recognize more sales in 2H
2014. Such a result would support its Ba2 rating.
Moody's expectation of BJCL's better revenue recognition in 2H
2014 is based on the company's inventory of RMB7.5 billion in
contracted sales at 30 June 2014. The inventory is scheduled for
delivery in 2H 2014.
For the first seven months of 2014, BJCL secured contacted sales
of RMB8.4 billion. While this result represents an 11.4% year-on-
year growth, it is less than 50 percent of its contracted sales
target of RMB28 billion for all of 2014.
Moody's expects BJCL's full year contracted sales will total
around RMB20 billion, given that: (1) the company's available
presale and completed resources for sales will total around RMB35
billion through year end, as more projects are launched; (2) some
70% of its products are targeted at meeting the demand of end-
users for properties with gross floor areas of no more than 90
square meters; and (3) of its total projects, 60% are in Beijing
and Tianjin, where the company has an established brand and where
demand for residential homes is resilient.
BJCL's debt leverage remained high at end-June 2014; a situation
which positions it at the weaker-end of its Ba2 rating.
Its total adjusted debt -- including senior perpetual securities
and financing arranged by Minsheng Royal Asset Management Co.,
Ltd. (unrated) -- increased to RMB32.1 billion at 30 June 2014
from RMB26.9 billion at end-2013. As a result, its adjusted
debt/capitalization stayed high at around 70%.
On the other hand, BJCL's cash on hand totaled RMB11.7 billion at
end-June 2014; an amount equivalent to 1.3x its short-term debt.
Its good liquidity position and state-owned enterprise status
lower the refinancing risk the company faces, despite its high
debt leverage.
The principal methodology used in this rating was Global
Homebuilding Industry published in March 2009.
Incorporated in China, Beijing Capital Land Limited is a mid-sized
developer in China's residential property sector. At 30 June 2014,
its land bank totaled 11.17 million square meters, with a saleable
land bank of 9.22 million square meters, across 15 cities in
China. Its land bank can support the company's development for the
next 3-4 years.
GREENTOWN CHINA: S&P Puts 'BB-' CCR on CreditWatch Negative
-----------------------------------------------------------
Standard & Poor's Ratings Services said that it had placed its
'BB-' long-term corporate credit rating and 'cnBB+' long-term
Greater China regional scale rating on China-based property
developer Greentown China Holdings Ltd. on CreditWatch with
negative implications. S&P also placed its 'B+' long-term issue
rating and 'cnBB' long-term Greater China regional scale rating on
the company's outstanding senior unsecured notes on CreditWatch
with negative implications.
"We placed the ratings on CreditWatch to reflect our view that
Greentown's cash flow and leverage could weaken over the next six
to 12 months if the company's profitability declines significantly
and its debt increases more than expected in our base-case
scenario," said Standard & Poor's credit analyst Christopher Yip.
S&P expects Greentown's profitability to remain weak over the next
two years based on the company's recent performance and the profit
warning issued on Aug. 4, 2014. Greentown's total debt will
likely increase further in 2014 because the company has large
construction and refinancing needs, and its weak profitability
could hit cash flows over the next six to 12 months.
"We aim to resolve the CreditWatch within the next three months
after we analyze Greentown's profitability and its impact on the
company's key financial ratios," said Mr. Yip.
S&P may revise the outlook to negative or lower the rating by one
notch if it believes that Greentown's profitability will
deteriorate significantly and its leverage will rise without any
signs of improvement over the next six to 12 months. This could
happen if its EBITDA interest coverage falls below 3x.
LONKING HOLDINGS: Moody's Withdraws B1 Corporate Family Rating
--------------------------------------------------------------
Moody's Investors Service has withdrawn Lonking Holdings Limited's
B1 corporate family rating with a negative outlook.
Ratings Rationale
Moody's has withdrawn the rating for its own business reasons.
Lonking Holdings Limited is a manufacturer and supplier of heavy
machinery in Mainland China. The company focuses on the production
of wheel loaders, which accounted for 65.6% of its total revenue
in 2013. It also makes excavators, road rollers, forklifts, and
other types of construction machinery.
The Local Market analyst for this rating is Jiming Zou, + 86 21
6101 0381.
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I N D I A
=========
AMARJYOTI DALL: CARE Revises Rating on INR7.50cr Loans to 'D'
-------------------------------------------------------------
CARE revises the ratings assigned to the bank facilities of
Amarjyoti Dall Mill.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 5 CARE D Revised
from CARE B
Short term Bank Facilities 2.50 CARE D Revised
from CARE A4
Rating Rationale
The revision in the ratings assigned to the bank facilities of
Amarjyoti Dall Mill (ADM) was primarily on account of delays
in debt servicing leading to classification of the account as a
non-performing asset (NPA) by the bank and discontinuation
of operations due to the disputes between partners.
Establishing a track record of clear debt servicing with an
improvement in the liquidity position and resuming the
operations are the key rating sensitivities.
Katni-based (Madhya Pradesh) ADM is a partnership firm, which was
initially promoted by Mr Mahesh Panjwani and his son, Mr Ishwarlal
Panjwani. On November 21, 2011, Mr Ishwarlal Panjwani retired from
the business and the firm was reconstituted by Mr Mahesh Panjwani
and Ms Kanta K Panjwani. ADM is engaged in the processing of arhar
dal (toor dal) and trading of dal chuni bhusi (used as cattle
feed). ADM sells its product under the brand names Chanda, Laadli
and Nandini. The entity's plant is located at Katni, Madhya
Pradesh with an installed capacity of 500 quintals per day and
carries out cleaning, splitting and grading operations.
AMR GLOBAL: CRISIL Reaffirms 'D' Rating on INR190MM Loans
---------------------------------------------------------
CRISIL's rating on the bank loan facilities of AMR Global
Industries Limited continue to reflect the overdrawn cash credit
facility for more than 30 days owing to its weak liquidity. The
company's account has been classified as a non-performing asset by
its banker.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 100 CRISIL D (Reaffirmed)
Cash Credit 90 CRISIL D (Reaffirmed)
AMR Global is exposed to intense competition in the commodity
trading industry resulting in its low profitability margins, and
has a weak financial risk profile marked by its small net-worth
and high total outside liabilities to tangible net-worth ratio.
AMR Global is part of the AMR group based in Hyderabad, which has
interests in mining, infrastructure, sugar, hospitality, and
agriculture. AMR was set up in 2005 by Mr. Mahesh Reddy and Mr.
Girish Reddy. The company primarily trades in dress materials,
iron ore, and steel products. The company is based in Hyderabad
(Andhra Pradesh).
ATHENA EDUCATIONAL: CRISIL Assigns 'D' Rating to INR84MM Loans
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL D' rating to the long-term bank
facilities of Athena Educational Trust.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft Facility 15 CRISIL D
Term Loan 69 CRISIL D
The rating reflects instances of delay by AET in servicing its
term loans; the delays have been caused by the trust's weak
liquidity, driven by its cash flow mismatches. As the trust's
school is in its nascent stage of operations, it is yet to
generate adequate cash flows, resulting in pressure on its
liquidity.
AET is also exposed to intense industry competition and to high
regulatory risks. However, the trust benefits from the established
brand of Delhi Public School (DPS), under which it operates its
school.
AET was founded in 2010 to set up a school in Khanna, Ludhiana
(Punjab) under the DPS franchise scheme. The school was set up in
2010 and its operations commenced from April 2011. Mrs. Indermeet
Bains, Mr. Hoshiar Singh Bains and Mr. Pahull Bains are the
trustees of AET.
The trust reported a net surplus of INR2.4 million on net fee
income of INR28.9 million for 2012-13 (refers to financial year,
April 1 to March 31), against a net surplus of INR1.17 million on
net fee income of INR30.3 million for 2011-12. Its net fee income
is estimated at INR38.4 million for 2013-14.
BENGAL SHELTER: CRISIL Suspends 'D' Rating on INR2.01BB Loans
-------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Bengal
Shelter Housing Development Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 1,419 CRISIL D Suspended
Proposed Long Term
Bank Loan Facility 118.5 CRISIL D Suspended
Rupee Term Loan 472.5 CRISIL D Suspended
The suspension of ratings is on account of non-cooperation by
Bengal Shelter with CRISIL's efforts to undertake a review of the
ratings outstanding. Despite repeated requests by CRISIL, Bengal
Shelter is yet to provide adequate information to enable CRISIL to
assess Bengal Shelter'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'
Bengal Shelter is part of the Kolkata (West Bengal)-based Shelter
group. The company was set up in 2003 as a 50:50 joint venture
between Shelter Projects Ltd and West Bengal Housing Board. The
Shelter group has been in the real estate development business for
nearly two decades; it has been present mainly in residential
development and has developed over 1.5 million square feet of
residential space. The group has completed over 25 residential
projects in Kolkata and in other suburban towns of West Bengal.
CACHE FURNITURE: CRISIL Reaffirms 'D' Rating on INR305MM Loans
--------------------------------------------------------------
CRISIL's rating on the bank facilities of Cache Furniture Ltd
continues to reflect instances of delays by CFL in servicing its
debt; the delays have been caused by the company's weak liquidity.
The company's account has been classified as a non-performing
asset by its banker.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 180 CRISIL D (Reaffirmed)
Letter of Credit 70 CRISIL D (Reaffirmed)
Long Term Loan 20 CRISIL D (Reaffirmed)
Standby Line of Credit 35 CRISIL D (Reaffirmed)
CFL has large working capital requirements, and is exposed to
intense competition in the furniture retail industry. However, the
company benefits from the extensive industry experience of its
promoters in the furniture retail segment.
CFL was incorporated in January 2008 by Mr. Ranbeer Singh Gandhi.
CFL is in the furniture retail segment, and is based in Andhra
Pradesh.
CHANDRAKONA COLD: CRISIL Reaffirms 'D' Rating on INR84.6MM Loans
----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Chandrakona Cold
Storage Pvt Ltd continue to reflect CCSPL's continuous over-
utilisation of its cash credit limit for more than 30 consecutive
days; this was because of the company's weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 2.9 CRISIL D (Reaffirmed)
Cash Credit 59.4 CRISIL D (Reaffirmed)
Proposed Long Term
Bank Loan Facility 9.9 CRISIL D (Reaffirmed)
Working Capital Facility 12.4 CRISIL D (Reaffirmed)
CCSPL has a weak financial risk profile, marked by high gearing
and weak debt protection metrics, and is exposed to intense
competition in the cold storage industry in West Bengal. However,
the company benefits from its promoters' extensive industry
experience.
Update
CCSPL's business risk profile improved with a revenue growth of 20
per cent year-on-year during 2013-14 (refers to financial year,
April 1 to March 31). The growth was driven by the upward revision
in storage rates by the government to INR120 per quintal from
INR101 per quintal; the potato cold storage industry in the state
is regulated by the Department of Agricultural Marketing,
Government of West Bengal. The upward revision in storage rates
combined with the sustained capacity utilisation of its storage
facility, resulted in an increase in the company's operating
margin to 16 per cent in 2013-14 from xx per cent in 2012-13.
CCSPL gives financial assistance to farmers in the form of
advances against cold storage receipts. This led to high gross
current assets of 1237 days in as on March 31, 2014. In keeping
with the working capital intensity of its operations, the
company's cash credit limits and working capital facility remained
fully utilised with instances of over-utilisation. In view of
CCSPL's modest cash generation, CRISIL expects the company's
liquidity to remain constrained over the medium term.
CCSPL's gearing remained high on account of its business model.
The company provides financial assistance to the farmers by
borrowing (seasonal cash credit loan) from banks against the
hypothecation of their stocks. Its gearing improved to 2.80 times
as on March 31, 2014, from 3.62 times as on March 31, 2013, in
view of decreasing debt and moderate improvement in its net worth.
CCSPL's debt protection metrics remained weak, with interest
coverage ratio of 2 times and net cash accruals to total debt
ratio of 0.06 times in 2013-14.
CCSPL was established in 1982 by Mr. Jayanta Kumar Roy and Mr.
Kanailal Roy. The company has set up a cold storage unit (with
four chambers) in Paschim Mednipur (West Bengal).
DEV COTTON: CARE Assigns 'B+' Rating to INR15.34cr Bank Loan
------------------------------------------------------------
CARE assigns 'CARE B+' rating to bank facilities of Dev Cotton
Industries.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 15.34 CARE B+ Assigned
Rating Rationale
The rating assigned to the bank facilities of Dev Cotton
Industries is primarily constrained on account of the modest
scale of operation coupled with financial risk profile marked by
thin profit margins, moderately leveraged capital structure and
weak debt coverage indicators. The rating is further constrained
due to operating margins susceptible to cotton price fluctuation,
seasonality associated with the cotton industry, presence in a
highly fragmented industry with limited value addition and prices
and supply for cotton being highly regulated by the government.
The above constraints outweigh the benefits derived from the
partners' experience and strategically located within the
cotton producing belt of Gujarat.
The ability to increase overall scale of operation, improvement in
profitability and capital structure along with efficient
working capital management are the key rating sensitivities.
Patan-based (Gujarat) Dev Cotton Industries was established during
March 2010 as a partnership firm by four partners, Mr Vasantkumar
S Rajgor, Mr Vasudevbhai K Rajgor, Mr Maheshkumar S Rajgor and Mr
Satyakam J Bhatt. DCI is into the business of cotton ginning and
pressing of cotton bales and cotton seed. DCI has installed
capacity of 6,082 metric tonnes per annum (MTPA) for cotton bales
and 12,166 MTPA for cotton seed. DCI has associate concern namely
Mangalam Oil Industries (rated CARE B+) which is engaged into the
business of extraction of oil from cotton seed and sale of de-
oiled cake.
During FY13 (refers to the period April 01 to March 31), DCI
reported a PAT of INR0.46 crore on a Total Operating Income
(TOI) of INR2.10 crore as against PAT of INR0.14 crore and TOI of
INR41.09 crore during FY12.
Furthermore during FY14, DCI achieved PAT of INR0.23 crore on a
TOI of INR74.74 crore.
DINESH DAS: CRISIL Lowers Rating on INR60MM Loans to 'D'
--------------------------------------------------------
CRISIL has downgraded its rating on the bank loan facilities of
Dinesh Das and Sons Mines and Steels Pvt Ltd to 'CRISIL D' from
'CRISIL B-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 25 CRISIL D (Downgraded
from 'CRISIL B-/Stable')
Term Loan 35 CRISIL D (Downgraded
from 'CRISIL B-/Stable')
The rating downgrade reflects instances of delay by DDSM in
servicing its term debt obligations on account of its weak
liquidity driven by low cash accruals from operations, which were
inadequate to meet term debt repayment obligations. Low cash
accruals were on account of significant decline in revenue and
modest profitability of the company. The weak liquidity is also
reflects instances of overdraws in cash credit facility for more
than 30 consecutive days over the past 12 months. This led to
insufficient funds to meet the debt obligations on due date.
Furthermore, the ratings factor in DDSM's small scale of
operations, customer and geographical concentration in its revenue
profile, and large working capital requirements. These rating
weaknesses are partially offset by the extensive industry
experience of DDSM's promoters in the mining industry.
Incorporated in 2005, DDSM mines quartz and manganese. The company
has leased four quartz mines and one manganese mine. The mines are
located in Odisha and Andhra Pradesh. The minerals are primarily
sold to steel manufacturers situated in eastern and south-eastern
India.
ELLORA CONSTRUCTION: CRISIL Cuts Rating on INR142.7MML Loans to D
-----------------------------------------------------------------
CRISIL has downgraded its rating on the bank facilities of Ellora
Construction Pvt Ltd to 'CRISIL D' from 'CRISIL BB-/Stable.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 142.7 CRISIL D (Downgraded
from 'CRISIL BB-/Stable')
The downgrade follows continued instances of overdrawn working
capital limits for more than 30 days by Ellora over the five
months through June 2014. The delays were driven by substantial
delays in receivables from a major customer.
Ellora is exposed to risks associated with large working capital
requirements, small scale of operations in the fragmented civil
construction industry, and geographic concentration in revenue.
However, the company benefits from its promoters' extensive
experience in the civil construction industry.
Ellora was established in December 2005 as a partnership firm by
Mr. Saleem Ahmed Bismillah Khan and his wife Mrs. Sameena Sultana;
it was reconstituted as a private limited company in April 2008.
ECPL undertakes construction and executes work orders for
buildings, roads, and infrastructure projects.
GEE PEE: CRISIL Suspends 'D' Rating on INR250MM Loan
----------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Gee Pee
Infotech Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 250 CRISIL D Suspended
The suspension of ratings is on account of non-cooperation by
GPIPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, GPIPL is yet to
provide adequate information to enable CRISIL to assess GPIPL'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'
GPIPL, incorporated in 1994 and promoted by Mr. Bijay Agarwal,
trades in mobile phones. Based in Kolkata (West Bengal), the
company imports cell phones from various manufacturers in China
and sells them under the Gee Pee brand in India. Most of GPIPL's
handsets are priced between INR1,499 and INR5,000. The day-to-day
operations of the company are managed by Mr. Agarwal. It is
present across 17 states, with a distribution network comprising
around 15 primary dealers and more than 100 secondary
distributors.
HOTEL RUMANI: CARE Assigns 'D' Rating to INR6.24cr Bank Loan
------------------------------------------------------------
CARE assigns 'CARE D' rating to the bank facilities of Hotel
Rumani.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 6.24 CARE D Assigned
Rating Rationale
The rating assigned to the bank facilities of Hotel Rumani factors
in the on-going delays in debt servicing on account of stretched
liquidity position of the firm.
Hotel Rumani was set up by Rabinarayan Samantray and Kunimani
Samantray of Puri (Odisha) as a partnership firm, governed by the
partnership deed dated April 01, 1999. Rumani has been engaged in
the hotel business since 2002 and had set up "Hotel Rumani" in
Puri. The hotel currently has 72 rooms with 31 standard rooms, 39
delux rooms and two conference halls for groups ranging from
approximately 150-300 people and a restaurant. The property mainly
caters to domestic customers, of which around 20% comprise
corporate clients and the remaining sales is driven
by the leisure travellers and long stay customers.
Rumani has completed its renovation works in November 2013 at a
project cost of INR9.35 crore financed at a debt equity
ratio of 2.53:1.
During FY13 (refers to the period April 1 to March 31), the firm
reported a PBILDT of INR1.15 crore (INR0.87 crore in FY12)
and a PAT of INR0.60 crore (INR 0.49 crore in FY12) on total
income of INR1.73 crore (INR 1.54 crore in FY12). Furthermore,
the management has maintained that the firm has achieved a
turnover of INR1.70 crore during 11MFY14.
IMAGE BROADCASTING: CRISIL Cuts Rating on INR300MM Loans to 'D'
---------------------------------------------------------------
CRISIL has downgraded its rating on the long term bank facilities
of Image Broadcasting India Private Limited to 'CRISIL D' from
'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 104 CRISIL D (Downgraded
Bank Loan Facility from 'CRISIL B/Stable')
Rupee Term Loan 196 CRISIL D (Downgraded
from 'CRISIL B/Stable')
The rating downgrade reflects instances of delay by IBI in
servicing its debt; the delays have been caused by the company's
weak liquidity
The rating also factors in the modest scale of operations and its
exposure to risks related to intense competition and to regulated
nature of television broadcasting industry. However, IBI benefits
from its in-house production capabilities leading to operational
efficiencies.
IBI was set up in 2010 by Mr. Chalsani Venkateswara Rao. The
company runs a Telugu news channel CVR News. The company is based
in Hyderabad.
JESSOP AND CO: CRISIL Reaffirms 'D' Rating on INR1.30BB Loans
-------------------------------------------------------------
CRISIL's ratings on the bank facilities of Jessop and Co Ltd
continue to reflect company's weak liquidity profile resulting in
consistent over utilisation of its cash credit limits for more
than 30 days. Weak liquidity profile is on account of stretch in
receivables.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 450 CRISIL D (Reaffirmed)
Cash Credit 600 CRISIL D (Reaffirmed)
Letter of Credit 250 CRISIL D (Reaffirmed)
JCL also has a below-average financial risk profile, marked by
moderate gearing and weak debt-protection metrics, and working-
capital-intensive operations. However, the company benefits from
its established brand and diverse product mix.
JCL was established in the eighteenth century as a heavy
engineering company. It is renowned for the construction of
Electric Multiple Unit coaches and wagons for the Indian Railways.
The company also manufactures diverse engineering products,
including bogie frames, cranes, road rollers, and hydraulic
cylinders; and undertakes fabrication of steel structures.
Additionally, JCL trades in steel products.
Mr. Pawan Kumar Ruia owns and manages the company.
KRISHNA GODAVARI: CRISIL Cuts Rating on INR1.02BB Loan to 'D'
-------------------------------------------------------------
CRISIL has downgraded its rating on the bank facility of Krishna
Godavari Power Utilities Limited to 'CRISIL D' from 'CRISIL B-
/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 1,021.9 CRISIL D (Downgraded
from 'CRISIL B-/Stable')
The rating downgrade reflects instances of delay by Krishna
Godavari in servicing its debt; the delays have been caused by the
company's weak liquidity.
Krishna Godavari is also exposed to risks related to the
implementation and stabilisation of its ongoing project, and to
volatility in coal prices. However, the company benefits from the
relatively assured power off-take backed by strong support from
PTC India Ltd.
Krishna Godavari is setting up an imported coal-based power plant
in Nalgonda district (Andhra Pradesh), with a power generation
capacity of 60 megawatts.
Late Dr. M Venkataratnam and his family own a 59 per cent stake in
the company, and the balance 41 per cent stake is owned by PTC
India Ltd.
MATRIX GLOBAL: CRISIL Cuts Rating on INR150MM Loans to 'D'
----------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Matrix Global Pvt Ltd to 'CRISIL D/CRISIL D' from 'CRISIL B-
/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 40 CRISIL D (Downgraded
from 'CRISIL A4')
Cash Credit 5 CRISIL D (Downgraded
from 'CRISIL B-/Stable')
Packing Credit 25 CRISIL D (Downgraded
from 'CRISIL A4')
Proposed Long Term 40 CRISIL D (Downgraded
Bank Loan Facility from 'CRISIL B-/Stable')
Proposed Short Term 40 CRISIL D (Downgraded
Bank Loan Facility from 'CRISIL A4')
The rating downgrade reflects instances of invocation of bank
guarantee leading to continuous overdrawing of the fund-based
limit by the company for more than 30 days mainly because of weak
liquidity. Liquidity is weak owing to a problem arising in one of
the company's consignments to Ethiopia, which lead to delays in
the receivables.
The ratings also reflect the company's high customer concentration
and exposure to volatility in revenue and profitability because of
uncertainties inherent in the tender-based business. These rating
weaknesses are partially offset by the benefits that MGPL derives
from its promoters' extensive experience in the export trading
business and its established relationship with its customers.
MGPL, incorporated in 2007, is an export trader of educational
books, laboratory equipment, medical equipment, and agricultural
equipment. The company participates in government tenders in
Africa and Russia. MGPL is promoted by Mr. Rajesh Sondhi and Mr.
Prabhat Kumar. The promoters have been in the business of merchant
trading for more than a decade.
MAYA RETAIL: CRISIL Cuts Rating on INR98.7MM Loans to 'D'
---------------------------------------------------------
CRISIL has downgraded the rating on the bank facilities of Maya
Retail Ltd to 'CRISIL D' from 'CRISIL B-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 65 CRISIL D (Downgraded from
'CRISIL B-/Stable')
Proposed Long Term
Bank Loan Facility 33.7 CRISIL D (Downgraded from
'CRISIL B-/Stable')
The rating downgrade reflects Maya Retail's weak liquidity, driven
by its loss making operations, since inception.
Maya Retail also has a weak financial risk profile, marked by its
negative net worth, high gearing and cash losses, along with its
small scale of operations. However, the company benefits from
operational and financial support from its parent, Gitanjali Gems
Ltd.
Maya Retail (formerly, Salasar Retail Ltd) was, set up in 2002, is
a chain of retail outlets that primarily deals in apparels and
branded jewellery. Maya was acquired by Gitanjali Gems Ltd in
December 2009, which held a 95.94 per cent equity stake in Maya as
on March 31, 2011, with the remaining shares being held by the
previous promoters. Maya's name was changed to the current one in
June 2011.
NIMITAYA HOTEL: CRISIL Suspends 'C' Rating on INR980MM Loan
-----------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Nimitaya Hotel & Resorts Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 30 CRISIL A4 Suspended
Overdraft Facility 980 CRISIL C Suspended
The suspension of ratings is on account of non-cooperation by NHRL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, NHRL is yet to
provide adequate information to enable CRISIL to assess NHRL'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'.
NHRL, incorporated in September 2006, has recently set up a 4-star
hotel in Gurgaon (Haryana). The hotel has been set up in
technical, marketing, and O&M tie-up with ITC Fortune Hotels,
under the Fortune Select Excalibur brand. The hotel has 136 rooms,
comprising 104 standard rooms and 32 Fortune club rooms. It also
has four restaurants, two pubs and two banquet halls. 2010-11
(refers to financial year, April 1 to March 31) was NHRL's first
year of operations.
PATDIAM JEWELLERY: CRISIL Reaffirms 'D' Rating on INR220MM Loans
----------------------------------------------------------------
CRISIL's rating on the bank facilities of Patdiam Jewellery
Private Limited continues to reflect instances of bills overdrawn
for more than 30 days; the overdrawn bills have been caused by the
company's weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Packing Credit 45 CRISIL D (Reaffirmed)
Post Shipment Credit 132.2 CRISIL D (Reaffirmed)
Pre Shipment Credit 42.8 CRISIL D (Reaffirmed)
Patdiam has large working capital requirements, and is exposed to
intense competition in the jewellery manufacturing industry.
However the company benefits from the extensive experience of its
promoters in the jewellery manufacturing industry.
Patdiam was incorporated in 1999 as a private limited company by
Mr. Pravin Kakadia and Mr. Chhaganbhai Navadia along-with their
family members. The company is engaged in manufacturing and export
of plain gold and diamond-studded gold jewellery.
PM SHAH: CARE Reaffirms 'B+' Rating on INR5cr Bank Loan
-------------------------------------------------------
CARE reaffirms the rating assigned to the bank facilities of
PM Shah & Co. Jewellers Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 5 CARE B+ Reaffirmed
Rating Rationale
The rating assigned to the bank facilities of PM Shah & Co.
Jewellers Private Limited continues to be constrained by
relatively modest scale of operations with low capitalization,
thin and fluctuating profitability margins, highly leveraged
capital structure along with weak debt coverage indicators. The
rating is further constrained by working capital intensive
nature of operations and presence in the highly competitive and
fragmented industry.
The rating, however, continues to derive strength from experience
of the management and long track record of operations.
Going forward, the ability of the company to achieve the envisaged
turnover and profitability amidst intense competition and
efficiently manage its working capital cycle, would be the key
rating sensitivities.
PM Shah & Company Jewellers Private Limited was established in
1964 as a partnership firm and subsequently converted into private
limited company in 1996. The company is engaged in manufacturing
(outsourced on job-work basis), trading and retailing of
hallmarked certified gold and diamond jewellery/ornaments. PMJ
operates through its retail outlets based in Mumbai (Chira Bazaar
and Vasai). The company procures gold bars from the bullion
traders & jewellery through dealers in the domestic market.
During FY14 (provisional), the total operating income of PMJ stood
at INR22.49 crore (compared to INR23.62 crore in FY13), while net
profit of the company stood at INR0.41 crore in FY14 (compared to
INR0.32 crore FY13).
PRAGATI MARINE: CRISIL Assigns 'D' Rating to INR70MM Loans
----------------------------------------------------------
CRISIL has assigned its 'CRISIL D/CRISIL D' ratings to the bank
facilities of Pragati Marine Services Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 16.8 CRISIL D
Proposed Long Term
Bank Loan Facility 8.2 CRISIL D
Bank Guarantee 10.0 CRISIL D
Cash Credit 35.0 CRISIL D
The rating reflects the instances of delays by PMSPL in servicing
its term debt obligations. The delays have been caused by
company's weak liquidity, which is on account of cash flow
mismatches.
The rating also reflects the susceptibility of the company's cash
flows to timely flow of orders and realization of receivables. The
rating is further constrained by the subdued financial risk
profile, marked by modest networth and high external indebtedness.
These rating weaknesses are partially offset by the extensive
experience of the promoter in the shipping services industry and
the company's established presence in crew and manning services.
PMSPL established in the year 2009 by Mr. Amrendra Kumar Singh.
PMSPL is engaged in the business of providing crew and manning
services for shipping industry. It also derives income by way of
rentals from leasing its tug and barge. PMSPL also derives
revenues from dredging contracts. The day-to-day operations of the
company are managed by Mr. Amrendra Kumar Singh with a team of
professionals.
PMSPL, reported a profit after tax (PAT) of INR 6.2 million on
operating income of INR 132.7 million for 2012-13 (refers to
financial year, April 1 to March 31), as against a PAT of INR 3.0
million on operating income of INR 90.2 million for 2011-12.
PUNJ LLOYD: CARE Cuts Rating on INR13,725.98cr Loans to 'D'
-----------------------------------------------------------
CARE revises ratings assigned to the bank facilities and NCDS of
Punj Lloyd Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 4,703.70 CARE D Revised from
CARE BBB+
Long/Short-term Bank 9,022.28 CARE D/CARE D
Facilities Revised from
CARE BBB+/CARE A2
Non Convertible Debenture I 150 CARE BB Revised from
CARE BBB+
Non Convertible Debenture II 255 CARE BB Revised from
CARE BBB+
Non Convertible Debenture III 300 CARE BB Revised from
CARE BBB+
Rating Rationale
The revision in the ratings assigned to the bank facilities of
Punj Lloyd Ltd takes into account delays by the company
in the servicing of the said debt obligations on account of its
weak liquidity position.
The revision in the rating assigned to the Non-Convertible
Debentures (NCDs) of PLL takes into account the deterioration
in the financial risk profile marked by significant net loss
incurred in FY14 (refers to the period April 1 to March 31) on
consolidated basis and in Q1FY15 (on standalone basis) due to loss
incurred in few of the projects and increased interest cost,
increased debt levels leading to high overall gearing ratio and
weak coverage indicators. The ratings also factor in the high
working capital intensity of operations and stressed liquidity
position.
The ratings, however, continue to derive comfort from the
experienced management, established track record of operations of
PLL in the construction industry and moderate order book position.
Going forward, timely raising of funds as envisaged via monetizing
certain assets and investments, ability to execute the order book
in a timely manner while improving profitability margins,
settlement of pending claims with clients and overall efficient
working capital management shall be the key rating sensitivities.
Punj Lloyd Ltd, promoted by Mr Atul Punj in 1988, is one of the
leading engineering & construction companies in India, providing
integrated design, engineering, procurement, construction (EPC)
and project management services for oil & gas, process industry
and infrastructure sector projects. PLL started its operations as
a pipeline laying company and has subsequently diversified into
various operations including offshore and onshore field
development and onshore rigs, infrastructure projects, EPC
services for power plants as well as defence sector projects. The
operations of the company are spread across various sectors as
well as various countries. PLL has various subsidiaries operating
in multiple geographies and engaged in EPC in the field of oil and
gas and infrastructure sector. The company's consolidated order
book as on Aug. 4, 2014, stood at INR21,164 crore (unexecuted
orders as on June 30, 2014, plus new orders received
after that).
For FY14, PLL (standalone) reported PAT of INR8 crore on total
operating income of INR8,486 crore. For Q1FY15, PLL
(standalone) reported total operating income of INR1,114 crore
with net loss of INR364 crore. On a consolidated basis, PLL
registered total operating income of INR11,116 crore with net loss
of INR637 crore in FY14.
R H AGRO: CRISIL Downgrades Rating on INR1.52BB Loans to 'D'
------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of R H
Agro Overseas Private Limited to 'CRISIL D/CRISIL D' from 'CRISIL
B-/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 10 CRISIL D (Downgraded
from 'CRISIL A4')
Cash Credit 850 CRISIL D (Downgraded
from 'CRISIL B-/Stable')
Foreign Exchange 50.1 CRISIL D (Downgraded
Forward from 'CRISIL A4')
Funded Interest 82.0 CRISIL D (Downgraded
Term Loan from 'CRISIL B-/Stable')
Term Loan 135.9 CRISIL D (Downgraded
from 'CRISIL B-/Stable')
Working Capital 400.0 CRISIL D (Downgraded
Term Loan from 'CRISIL B-/Stable')
The rating downgrade reflects the delay by RH Agro in servicing
its bank debt. The delay was caused by the company's weak
liquidity, driven by low cash accruals arising from inventory
loss.
RH Agro has a weak financial risk profile, marked by high gearing
due to its large debt obligations, and working-capital-intensive
operations. The company is also susceptible to volatility in raw
material prices and to regulatory changes. However, RH Agro
benefits from its moderate scale of operations, its promoters'
experience in the agricultural commodities industry, and the
healthy growth prospects for the basmati rice industry.
RH Agro was set up in 2005-06 (refers to financial year, April 1
to March 31) by Mr. Dilbagh Rai Chawla and Mr. Sukhchain Chawla.
It mills, processes, and sells basmati rice. The company's
promoters have been in the rice business for 25 years through LT
Foods Ltd (sells under the Dawat basmati brand). RH Agro's rice
milling unit at Sonepat (Haryana) has a rice milling, grading, and
sorting capacity of 30 tonnes per hour. The company sells rice
under the brand names Hardik, Nafis, and Dilshan.
REXON STRIPS: CRISIL Suspends 'D' Rating on INR318MM Loans
----------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Rexon
Strips Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 10 CRISIL D Suspended
Cash Credit 220 CRISIL D Suspended
Letter of Credit 10 CRISIL D Suspended
Proposed Long Term
Bank Loan Facility 30 CRISIL D Suspended
Term Loan 48 CRISIL D Suspended
The suspension of ratings is on account of non-cooperation by RSL
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, RSL is yet to
provide adequate information to enable CRISIL to assess RSL'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'.
RSL, promoted by the Rourkela (Orissa)-based Kejriwal family,
manufactures sponge iron and ingots with capacity of 60,000 tonnes
per annum (tpa) and 25000 tpa, respectively. The company also has
a 0.3-million-tpa pellet plant; however, the plant is currently
closed for modernisation. In August 2011, RSL commenced commercial
operations at its 0.3-million-tpa iron ore beneficiation unit. The
company procures iron ore from Orissa Mining Company (OMC) and
Aryan Mines, and coal from Mahanadi Coalfields Ltd (MCL),
primarily against advance/spot payment. RSL has a coal linkage
with MCL for monthly coal supply of 6000 tonnes. RSL has also
entered into a quantitative agreement with OMC for procurement of
1 million tonnes of iron ore fines per annum for its iron ore
beneficiation unit. RSL markets sponge iron and ingots in North
India, primarily in Punjab and Uttar Pradesh, and also in North-
East India against a credit period of 7 to 10 days.
S.R. STEELS: CRISIL Suspends 'D' Rating on INR170MM Loans
---------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of S.R.
Steels.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 60 CRISIL D Suspended
Long Term Loan 110 CRISIL D Suspended
The suspension of ratings is on account of non-cooperation by SRS
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SRS is yet to
provide adequate information to enable CRISIL to assess SRS'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'
SRS is a partnership firm, which was set up in 2008 by Mr.
Surinder Arora, Mrs. Rajni Arora, and Mr. Anuj Arora. The firm has
set up a steel rolling mill with capacity to manufacture around
60,000 tonnes per annum of TMT bars in Una (Himachal Pradesh) at a
project cost of INR177.5 million. The project was funded through a
term loan of INR110 million and an equity contribution of INR67.5
million from the promoters. The firm has entered into an agreement
with Kamdhenu Industries Limited to sell its TMT production under
the Prime Gold brand.
SRS's promoter-partners own two other companies, Bharat Graphite
Pvt Ltd and HN Steels Pvt Ltd, which trade in ferroalloys and
refractory materials and manufacture steel ingots, respectively.
SCAN STEELS: CARE Assigns 'B+(FD)' Rating to INR10.29cr Loan
------------------------------------------------------------
CARE assigns 'CARE B+ (FD)' rating to the fixed deposit issue of
Scan Steels Ltd.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Medium Term Instrument- 10.29 CARE B+ (FD)
Fixed Deposit Assigned
Rating Rationale
The rating of Scan Steels Ltd is constrained by marginally
positive cash accruals incurred by SSL in FY14 (refers to the
period April 1 to March 31), corporate guarantee extended to a
group company for bank loans availed by it, stretched liquidity
position, low capacity utilisation, lack of backward integration
for primary raw materials, volatility in prices of raw material
and finished goods, and almost full utilisation of working capital
limits. The above constraints are partially offset by the
satisfactory business experience of the promoters and continuous
support by way of regular equity infusion by them.
Ability of the company to manage its working capital effectively,
improve its liquidity position and generate profitability
through optimum capacity utilisation are the key rating
sensitivities.
Scan Steels Ltd belonging to Gadodia family of Orissa, is engaged
in manufacturing of sponge iron (2,10,000 MTPA), ingots (1,16,000
MTPA) & MS rod (58,000 MTPA). SSL also has a captive power plant
of 12 MW, which partially meets its power requirement. The plants
are located in Orissa and Karnataka. The promoters, Mr. Rajesh
Gadodia and his brother Mr. Nimish Gadodia, are at the helm of the
affairs of the company.
SSL incurred net loss of INR16.95 crore on total operating income
of INR419.82 crore in FY14 (refers to the period April 1 to
March 31) as compared to a net loss of INR1.7 crore on a total
operating income of INR29.58 crore in FY13 (refers to the
period April 1 to March 31).
SECUNDERABAD HOTELS: CRISIL Suspends 'D' Rating on INR300MM Loans
-----------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Secunderabad Hotels Pvt Ltd (SHPL; part of the Minerva group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 9.0 CRISIL D Suspended
Rupee Term Loan 212.9 CRISIL D Suspended
Secured Overdraft
Facility 15.0 CRISIL D Suspended
Term Loan 63.1 CRISIL D Suspended
The suspension of ratings is on account of non-cooperation by SHP
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SHP is yet to
provide adequate information to enable CRISIL to assess SHP'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'.
CRISIL has combined the business and financial risk profiles of
SHPL and Vijayawada Hospitalities Pvt Ltd, together referred to as
the Minerva group. This is because VHPL is a subsidiary of SHPL,
both the companies are engaged in a similar line of business, and
are owned and managed by the same promoter. Also, both the
companies operate hotels under the same name and support each
other in case of business or financial exigencies.
Based in Secunderabad (Andhra Pradesh [AP]), SHPL was incorporated
in 2005 and is managed by Mr. A Vijayavardhan Reddy. SHPL operates
two three-star hotels under the name, Minerva Grand, which have a
total of 180 rooms and other facilities, such as fitness and
business centre, restaurants, boardroom, banquette hall, and
marriage hall. The company also operates two restaurant chains,
Blue Fox Restaurants and Minerva Coffee Shops.
VHPL operates a 40 rooms three-star hotel in Vijayawaya (AP),
Minerva Grand. The hotel's operations began from December 2010 and
have facilities such as a coffee shop, multi-cuisine restaurant
and bar, business centre, boardrooms, fitness centre, and banquet
hall.
The group has set up a three-star hotel in Tirupati (AP) at a cost
of INR145 million; 70 per cent of the cost was funded by debt and
the hotel is expected to commence operations from August 2012. The
group is setting up another three-star hotel in Hyderabad (AP) at
a cost of INR110 million; 65 per cent of the cost will be funded
by debt and the hotel is expected to commence operations from
September 2012.
SHANKAR SOYA: CARE Reaffirms 'B' Rating on INR6.14cr Bank Loan
--------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Shankar Soya Concepts.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank Facilities 6.14 CARE B Re-affirmed
Short-term Bank Facilities 2.81 CARE A4 Re-affirmed
Rating Rationale
The ratings assigned to the bank facilities of Shankar Soya
Concepts continue to remain constrained on account of
its small scale of operations in the highly fragmented and
competitive agro commodity industry and susceptibility of
operating margins to the raw material price fluctuation. The
ratings are further constrained due to its financial risk profile
marked by net loss reported during FY14 (provisional; refers to
the period April 1 to March 31), leveraged capital structure, weak
debt coverage indicators and moderate liquidity position.
The ratings, however, continue to derive benefits from the wide
experience of the partners for more than three decades through
group concerns having presence in soya-related products, receipt
of various government benefits owing to SSC's unit located in
Special Economic Zone and proximity to raw material source.
The ability of SSC to increase its scale of operations with
improvement in profit margins in light of volatile raw material
prices and improvement in the capital structure along with better
working capital management remain the key rating sensitivities.
Indore-based (Madhya Pradesh) SSC is a partnership firm
established by Mr Manish Mangharamani, Mr Ashok Mangharamani and
Ms Kavita Mangharamani in January 2011 with an objective to carry
out the business of manufacturing of Soya Lecithin and other soya
products. SSC completed a green-field project during September
2013 with an installed capacity of 3,960 metric tonnes per annum
(MTPA) for soya products at Indore (Madhya Pradesh). The finished
products of SSC are applied in varied industries such as
cosmetics, pharmaceuticals, food and paint. SSC caters demand of
Europe, Middle East and South East Asian markets to sell its
products.
SSC is a part of the 'Shankar Group of Companies', which includes
group entities, viz, Satyam Oil & Proteins Industries, Shankar
Chemical Products, Shankar Soya Products, Sai Shakti Constructions
Private Limited, Sunshine Spaces Private Limited and Sai Shakti
Agrotech Private Limited. These entities are also in the business
of manufacturing and trading of soya-related products except Sai
Shakti Constructions Pvt. Ltd. and Sunshine Spaces Pvt. Ltd.,
which are into real estate business.
During FY14, SSC reported a TOI of INR.36 crore and net loss of
INR0.20 crore. Furthermore during Q1FY15, SSC reported a TOI of
INR4.50 crore.
SHRI BIHARIJI: CARE Assigns 'B' Rating to INR63.72cr Bank Loan
--------------------------------------------------------------
CARE assigns 'CARE B/CARE A4' ratings to bank facilities of
Shri Bihariji Cold Rollers Pvt Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 63.72 CARE B Assigned
Short term Bank Facilities 14.00 CARE A4 Assigned
Rating Rationale
The aforesaid rating is constrained by weak financial position
with losses in FY13 & FY14 and high gearing ratios, liquidity
issues in the past with restructuring of loans, working capital
intensive nature of operations, relatively small scale of
operations with thin profitability, customer & supplier
concentration risk and susceptibility to raw material price
volatility. The rating however, draws strength from the experience
of promoters and diversified use of the products.
Ability to increase scale of operations & start repayments after
moratorium period are the key rating sensitivities.
Shri Bihariji Cold Rollers Pvt. Ltd., incorporated in July 1999,
was promoted by Shri Durga Prasad Agarwal and Smt. Sangita Agarwal
(wife of Shri Agarwal) of Kolkata to set up a 6000 metric tonnes
per annum (MTPA) Cold Rolling Steel Strips (CRSS) plant at Howrah,
West Bengal. The plant commenced commercial operation from January
2000. The company has expanded its facilities over the years and
currently has manufacturing capacity of CRSS of 36,000 MTPA. The
manufacturing facility of the company is ISO 9001:2008 certified.
SBCRPL is a closely held company. The day-to-day affairs of the
company are looked after by Shri Agarwal with adequate support
from Smt. Agarwal and a team of experienced professionals.
In FY13, the company's total operating income was INR132.79 crore
with a PBILDT of INR0.61 crore and a loss of INR5.97 crore. In
FY14 (Provisional), the company's total operating income was
INR26.00 crore with an operating loss of INR1.80 crore and a net
loss of INR5.50 crore.
SHRI KRISHNA: CARE Revises Rating on INR10.50cr Loan to 'B+'
------------------------------------------------------------
CARE revises the rating assigned to the bank facilities of
Shri Krishna Motor Company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank Facilities 10.50 CARE B+ Revised from
CARE B
The rating assigned by CARE is based on the capital deployed by
the partners and the financial strength of the firm at present.
The ratings may undergo a change in case of the withdrawal of
capital or the unsecured loans brought in by the partners in
addition to the financial performance and other relevant factors.
Rating Rationale
The revision in the rating takes into account the increase in
Total Operating Income (TOI) and improvement in profitability
of Shri Krishna Motor Company in FY14 (refers to the period
April 1 to March 31) along-with the continuous infusion of funds
by the partners.
The rating, however, continues to remain constrained on account of
SKMC's weak financial risk profile marked by weak solvency
position and moderate liquidity position, stiff competition among
automobile dealers and limited bargaining power with principal
automobile manufacturer.
The rating continues to derive strength from the vast experience
of the partners in the automobile dealership business and
authorised dealership of commercial vehicles of VE Commercial
Vehicles Limited.
SKMC's ability to increase its scale of operations with
improvement in profitability and capital structure are the key
rating sensitivities.
Alwar-based (Rajasthan) SKMC was formed in the year 1994 as a
partnership concern by Mr Pramod Agarwal, Mr Prashant Agarwal and
Mr Amith Agarwal having equal profit sharing ratio. SKMC is an
authorized dealer for the sale of commercial vehicles of VECV.
Currently, SKMC has three showrooms, one located at Alwar and two
in Mumbai for Heavy Commercial Vehicles (HCV), Light Commercial
Vehicles (LCV) and buses of VECV. All the showrooms of the firm
offer 3-S facilities (Sales, Service and Spare-parts).
Furthermore, the firm also provides servicing and sales of spare
parts of commercial vehicles and buses at Bhiwadi, Kishangarh,
Dausa, Bharatpur and Sawai Madhopur.
During FY14, SKMC has reported a total operating income of
INR97.75 crore as against INR7.47 crore in FY13 and PAT of
INR0.29 crore during FY14 as against net loss of INR0.1.51 crore
in FY13.
SPICEJET LIMITED: Auditors Raise Going Concern Doubt
----------------------------------------------------
The Times of India reports that the auditors of SpiceJet Ltd have
raised doubts on the low-cost carrier's (LCC) claims to be a
"going concern" -- a business term used to denote that an
organization has the ability to generate resources for operating.
The auditor has pointed out that on June 30, 2014, the LCC's
"total liabilities exceeded its total assets by INR1,145.5 crore,"
the report says.
Auditors of Kingfisher give similar warnings with results, both
before Vijay Mallya's failed airline got grounded in October 2012
and after that too, according to the report.
According to TOI, the red flag for SpiceJet was raised in the
audit report along with its result for the quarter ended June 30,
2014, in which the LCC reported losses of INR124 crore against a
profit of INR50.6 crore a year ago. In the notes, SpiceJet's
managing director S Natrajhen said the company's accumulated
losses added up to INR2,648 crore at the end of June 30, 2014, TOI
discloses.
"These conditions (overall financial health) . . . indicate the
existence of a material uncertainty that may cast doubt about the
company's ability to continue as a going concern," auditor S R
Batliboi and Associates LLP's limited review report with the LCC's
Q1 result said, TOI relays. The auditor has also added that
SpiceJet's Q1 loss -- its fourth straight quarterly loss -- would
have been higher by almost INR7.5 crore had the airline made a
provision for interest of like amount, TOI adds.
SpiceJet is yet to give Form 16 for financial year 2013-14 to its
employees and is facing other statutory tax issues also, the
report adds. The airline has been constantly coming up with
discount offers to raise cash for working capital requirements,
TOI notes.
According to TOI, The Centre for Asia Pacific Aviation (CAPA)
estimates that SpiceJet required about $250 million as of
March 2014 to bring its books in order. "It may require further
fund infusion for growth and expansion. Raising capital in next
one to three months is critical," CAPA India head Kapil Kaul had
said recently, TOI relays.
On its part, the LCC management claims it is taking all steps to
improve the product, cut costs, generate more revenue and get fund
infusion, notes the report. SpiceJet's MD S Natrajhen said in his
notes, "The company also continues to explore various options to
raise financing in order to meet its short term and long term
obligations."
TOI adds that the LCC said that it had an operating profit of INR9
crore in Q1 FY 2014-15. "During the quarter, SpiceJet also
incurred restructuring and certain one-off costs consisting of
INR133 crore relating to restructuring of the network and fleet
along with capacity rationalization that required early aircraft
lease terminations and associated expenses for four aircraft . . .
As a result of the above restructuring and certain one-off costs
totalling INE133 crore, SpiceJet reported a net loss of INR124
crore for the quarter ending June 2014," the airline, as cited by
TOI, said.
SpiceJet Limited -- http://www.spicejet.com/-- is an India-based
low-budget air carrier. The Company operates daily flights
between major cities in India.
As reported in the Troubled Company Reporter-Asia Pacific on
May 21, 2014, The Times of India said SpiceJet has posted its
highest ever annual loss of INR1,003.2 crore in the financial year
2013-14 up five times from INR191 crore in the previous fiscal.
SRI VIJAYABHERI: CRISIL Reaffirms 'D' Rating on INR276.7 Loans
--------------------------------------------------------------
CRISIL's ratings on bank fcailities of Sri Vijayabheri Cotton
Mills Pvt Ltd continue to reflect instances of delays by SVCMPL in
servicing its debt; the delays have been caused by the company's
weak liquidity. The company's account has been classified as a
non-performing asset by its banker.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5.8 CRISIL D (Reaffirmed)
Cash Credit 40.0 CRISIL D (Reaffirmed)
Proposed Short Term
Bank Loan Facility 0.9 CRISIL D (Reaffirmed)
Term Loan 230.0 CRISIL D (Reaffirmed)
SVCMPL is also exposed to risks related to the implementation and
stabilisation of its ongoing project. However, the company
benefits from the extensive industry experience of its promoters.
SVCML was promoted in 2011 by Mr.K.Siva Naga Malleswara Rao and
his wife Mrs.K.Ratna. The company is setting up a cotton-yarn
spinning mill in Guntur district in Andhra Pradesh.
=================
I N D O N E S I A
=================
BERAU COAL: Moody's Downgrades Corporate Family Rating to B2
------------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating of PT Berau Coal Energy Tbk's (BCE) to B2 from B1 as well
as the senior secured ratings on the bonds issued by BCE and Berau
Capital Resources Pte Ltd, which are guaranteed by BCE.
The outlook for all ratings remains negative.
At the same time, Moody's has withdrawn the provisional (P)B1
rating assigned to Berau Capital Resources II Pte. Ltd.'s proposed
senior secured notes on 25 July 2014, as the issuance has been
postponed. BCE announced on 12 August that the company had decided
not to proceed with the proposed bond transaction due to adverse
market conditions. The company intends to proceed with the
refinancing plans when market conditions permit.
Ratings Rationale
"The downgrade of BCE's ratings to B2 was driven by a combination
of the sustained decline in thermal coal prices, resulting in the
weakening of earnings and cash flows, and the increasing
refinancing risk with its USD450 million senior secured notes
maturing in less than 12 months" says Brian Grieser, a Moody's
Vice President and Senior Analyst. "The decision to postpone its
proposed offering reduces Berau's much-needed financial
flexibility and exposes the company to ongoing market risk during
a period of prolonged operating weakness and significant
transition at both the management and board levels."
"BCE's cash buffer supports its B2 ratings in an environment where
Moody's expect free cash flow to be modestly negative over the
next 12-18 months," adds Grieser, who is also lead analyst for
BCE. Cash balances at 31 March 2014 were roughly USD365 million.
Moody's expects BCE's management to continue implementing cost
reduction measures, focus on cash preservation and defer any large
expansionary capex plans until coal prices experience a meaningful
improvement.
"The rating also accommodates our expectation that earnings
deterioration will drive BCE's financial leverage higher in 2014-
15, towards 4.5x-5.0x from 3.8x in March 2014," says Grieser.
The negative outlook reflects the continued pressure on BCE's
credit metrics driven by the persistent decline in thermal coal
prices since 2012 and also takes into account Moody's expectation
that coal prices will remain under pressure over the next 12
months offsetting the benefits of cost cutting and cash
preservation initiatives.
Moody's will continue to monitor corporate governance and
accountability at BCE following the recent round of management
changes and the completed separation between BCE's parent, Asia
Resource Minerals plc (ARM, unrated) and the Bakrie Group
(unrated). Moody's believe the company's willingness to delay the
refinancing to seek better terms and its efforts to loosen
covenants in the existing bonds, allowing for incremental debt,
indicate a somewhat more aggressive financial posture.
Moody's have revised our downgrade triggers to reflect our current
view on BCE's credit profile. A rating downgrade would occur if 1)
BCE is unable to refinance its $450 million senior secured notes
over the next few months; 2) Coal prices fail to stabilize and
thus fall short of our $75-80 per ton target in the next twelve
months; 3) there is a material decline in BCE's cash balances
driven by earnings declines, large expansionary capex projects or
debt-funded acquisitions.
Specific indicators Moody's would look for include adjusted
debt/EBITDA exceeding 5.5x, and/or EBIT/interest falls below 1.5x.
Other negative rating triggers include: 1) any adverse decisions
regarding the off-setting of payments for VAT; or 2) any change in
laws and regulations, particularly in relation to mining
concessions that would adversely affect BCE's business.
Upward rating momentum is limited given the negative outlook and
our view that deleveraging will be challenging in the current
pricing environment. Nonetheless, a positive ratings action would
require a successful refinancing and BCE maintaining its financial
leverage below 4.0x and EBIT/interest above 2.5x for an extended
period. Any positive action would also require BCE to exhibit a
strong liquidity profile in concert with an improvement in
realized coal prices.
The principal methodology used in these ratings was Global Mining
Industry published in August 2014.
BCE is an investment holding company listed on the Indonesian
Stock Exchange. It has a 90% interest in PT Berau Coal (unrated),
Indonesia's fifth-largest producer and exporter of thermal coal.
Berau operates three active mines -- Lati, Sambarata and Binungan
-- at a single site in East Kalimantan. It has estimated resources
of about 2.2 billion tons, with probable and proven reserves
estimated at 509 million tons (mt).
====================
N E W Z E A L A N D
====================
HANOVER FINANCE: Hotchin Loses Appeal Over Decision
---------------------------------------------------
The New Zealand Herald reports that Mark Hotchin has lost an
appeal over a decision which said Hanover Finance's trustees did
not have a duty to verify the accuracy of statements in allegedly
misleading prospectuses.
Mr. Hotchin and five others associated with Hanover companies are
being sued by the Financial Markets Authority for allegedly
misleading or untrue statements in finance company prospectuses.
The case is due to go to trial in July next year and is expected
to take up 12 weeks in the High Court at Auckland, the report
says.
According to the Herald, the FMA is seeking compensation for
investors who put NZ$35 million into Hanover Finance, Hanover
Capital and United Finance between December 2007 and July 22,
2008. The Herald relates that Mr. Hotchin last year attempted to
join two trustee companies -- New Zealand Guardian Trust Company
and Perpetual Trust -- into the FMA's civil case against him.
The Herald notes that Mr. Hotchin argued the trustees held a duty
of care to investors and that they should contribute to any
damages payable if the FMA's case succeeds. But the trustees
fought the attempt and last year the Chief High Court Judge Helen
Winkelmann struck out Mr. Hotchin's application to join them in
the civil action.
The report relates that Mr. Hotchin in June appealed the decision
to strike out, but it was dismissed on August 15 by the Justices
Douglas White, Rhys Harrison and Christine French.
The Herald reports that Justice Rhys Harrison in the decision said
Mr. Hotchin's claim for equitable contribution was "unarguable".
The report adds that Justice Harrison said Mr. Hotchin and
trustees owed investors different duties.
"Mr Hotchin owed the investors a duty to make accurate statements
in prospectuses and certificates. The damage suffered by the
Hanover investors as a result of Mr Hotchin's alleged breach of
duty was the loss of their deposits made in reliance on those
statements or the excessive prices paid," the Herald quotes
Justice Harrison as saying.
"The trustees' duties were of a very different nature, to protect
investors against the harm arising from breaches of the companies'
obligations under the trust deeds. The trustees cannot be liable
in respect of the damage suffered by the investors where they did
not owe a duty to protect them against the harm of inaccuracies in
the directors' statements," the judge, as cited by the Herald,
said.
About Hanover Finance
Hanover Finance Limited -- http://www.hanover.co.nz/-- was
New Zealand's third-largest privately-owned finance company with
total assets of NZ$796 million at December 31, 2007. The company
was established in 1984 to provide finance to the rural sector
and began lending to property developers and investors in 1995.
The loan portfolio has been gradually downsized since 2006 as a
result of a more cautious approach to lending in the face of
retail funding constraints.
Hanover Finance's investors in December 2008 voted in favor of
the company's Debt Restructure Proposals, including a plan to
fully repay NZ$552.6 million principal it owes over five years.
However, Hanover Finance said in November 2009 it is no longer
likely to fully repay investors under a debt restructuring plan
due to a deterioration in the commercial property development
market, a TCR-AP report on Nov. 12, 2009, said.
In December 2009, investors agreed to swap their Hanover
interests for shares in Allied Farmers Ltd.
The Serious Fraud Office commenced an investigation into the
affairs of Hanover Finance Ltd in September 2010 after
considering complaints received from the Securities Commission,
Allied Farmers and others.
The Financial Markets Authority, on March 30, 2012, filed civil
proceedings against directors and promoters of Hanover Finance
Ltd, Hanover Capital Ltd, and United Finance Ltd. Proceedings
under the Securities Act have been filed against Mark Hotchin,
Eric Watson, Greg Muir, Sir Tipene O'Regan, Bruce Gordon and
Dennis Broit. They relate to statements made in the
December 2007 prospectuses, subsequent advertising, and the
March 2008 prospectus extension certificate.
SFO on April 30, 2013, said it has completed its investigation
of Hanover Finance, bringing to an end its investigations into the
2007/08 finance company collapses. That process, which saw SFO
investigate 15 separate companies, resulted in criminal
prosecutions in relation to nine companies. Overall, 23
individuals have faced charges laid by SFO.
NELSON BUILDING: Fitch Affirms 'BB+ LT Issuer Default Rating
------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) of Nelson Building Society (NBS) at 'BB+'. The Outlook is
Stable.
Key Rating Drivers - IDR and viability rating (VR)
The affirmation of NBS's IDR, VR and Stable Outlook reflect the
society's consistently strong operating performance, solid asset
quality, stable funding and liquidity profiles and adequate
capital ratios. The main constraint on the ratings is the
society's moderate franchise which can limit pricing power and
competitive advantages, and NBS's small absolute size which
increases concentration risks.
Intense lending competition has constrained loan growth and
profitability for some smaller FI's in New Zealand. However, NBS
performance in the face of this pressure has been very strong.
Operating profits increased 43% to NZD3.1m as the society
continues to benefit from good loan growth (up 10% in financial
year ended 31 March 2014 'FYE14) and wider net interest margins of
2.51% in FY14 (FY13: 2.43%).
The majority of NBS's growth has originated from the more recently
established Takaka and Ashburton branches. A solid regional
presence, strong community links, and established and experienced
branch managers have enabled NBS to compete on its service
proposition and help offset pricing pressure in the market.
However, as a mutual institution, NBS has limited capital raising
options and rapid loan growth has pressured capital ratios.
Capital ratios are maintained with moderate buffers over
regulatory minimums and using a non-risk adjusted measure of
tangible common equity/tangible assets are lower than domestic
peers. However, measured against more highly rated international
peers, NBS capital ratios were stronger. Solid earnings enabled
this ratio to increase to 6.16% at FYE14 (FYE13: 5.82%).
Despite rapid loan growth the society has maintained a
conservative underwriting approach, reflected in its historically
solid asset quality. At FYE14, NBS had two impaired loans which
equated to a loan-impairment/gross loan ratio of 0.45% (FYE13:
0%), and well secured past due loans had declined by 62% to
NZD0.4m.
Rating Sensitivities - IDR AND VR
An upgrade to NBS's IDR and VR would require the society to
improve the value of its franchise, decrease its concentrations
and strengthen its capital position. This would most likely be the
result of the successful execution of its growth strategy, on-
going improvements in operating profitability and cost control,
and no deterioration in asset quality.
A negative rating action could occur if asset quality unexpectedly
deteriorated due to its large single-name or geographic
concentrations, or because of poorly managed expansion and loan
growth. Weaker capitalisation and damage to NBS's reputation and
franchise could have a knock on effect on deposits and threaten
the society's access to funding, possibly resulting in a rating
downgrade.
Key Rating Drivers & Rating Sensitvities - Support Rating And
Support Rating Floor
The Support Rating of '5' and Support Rating Floor of 'No Floor'
reflect Fitch's view that while support from the authorities is
possible, it cannot be relied upon. The Support Rating and Support
Rating Floor take into account the existence of a legal framework
- the Open Bank Resolution Scheme (OBR), which reflects a reduced
propensity of the New Zealand government to support to financial
institutions.
The Support Rating and Support Rating Floor are sensitive to any
change in assumptions around the propensity or ability of the New
Zealand government to provide timely support to the bank.
The rating actions are as follows:
Nelson Building Society (NBS):
Long-Term IDR affirmed at 'BB+'; Outlook Stable;
Short-Term IDR affirmed at 'B';
Local Currency Long-Term IDR affirmed at 'BB+'; Outlook Stable;
Local Currency Short-Term IDR affirmed at 'B';
Viability Rating affirmed at 'bb+';
Support Rating affirmed at '5'; and
Support Rating Floor affirmed at 'NF'.
WAIRARAPA BUILDING: Fitch Affirms 'BB+' LT Issuer Default Rating
----------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) of Wairarapa Building Society (WBS) at 'BB+'. The Outlook is
Stable.
Key Rating Drivers - IDR And Viability Rating (VR)
The affirmation of WBS's IDR, VR and Stable Outlook reflect the
society's moderate franchise, good asset performance but large
relative loan and investment property exposures, and adequate
capital ratios containing satisfactory buffers over regulatory
minimums.
WBS's conservative underwriting approach is reflected in the
performance of its loan book despite significant single name
concentration that can increase volatility. At FYE14, WBS had
three impaired loans totalling NZD516,000 and well secured past
due loans had increased by 59% to NZD1.7m (1.9% of net loans).
However, average loan to value ratios (LVRs) on these loans are
low and since year end two of the impaired loans have been
reclassified as performing.
Capital ratios are high relative to peers but Fitch views this as
appropriate given WBS's small absolute capital base, limited
capital raising options, and large loan concentrations. Measured
by non-risk-adjusted total tangible equity/total tangible assets,
capitalisation decreased slightly to 13.9% at FYE13 (FYE12 15.1%)
as asset growth outpaced earnings.
Operating as a price taker, strong lending competition could
constrain loan growth and profitability in the financial year 2015
(FY15) although strategic initiatives to support growth appear to
have gained some early traction. In FY14 operating profits
increased by 11% year on year to NZD330,000 as the society
improved its cost base and generated stronger rental income, but
offset somewhat by further fair value write downs in its
investment property portfolio.
WBS's loan book is fully deposit funded and the society's
loans/deposit ratio was a solid 93% at FYE14. The society's
liquidity position was well in excess of its trust deed
requirements at FYE14, although it consisted mainly of NZD18m of
undrawn committed facilities. WBS's on-balance-sheet liquidity is
a more modest NZD13.3m.
RATING SENSITIVITIES - IDR AND VR
WBS's IDR and VR are unlikely to be upgraded due to the society's
small absolute capital base, small domestic franchise, and
geographic and large-loan concentrations.
A negative rating action could occur if asset quality unexpectedly
declined leading to capital erosion. Damage to WBS's franchise
from a weaker capital position or operational risks could also
result in a rating downgrade. In addition, any reputational damage
could in turn impact deposits and threaten the society's liquidity
and access to funding.
Key Rating Drivers & Rating Sensitvities - Support Rating And
Support Rating Floor
The Support Rating of '5' and Support Rating Floor of 'No Floor'
reflect Fitch's view that while support from the authorities is
possible, it cannot be relied upon. The Support Rating and Support
Rating Floor take into account the existence of a legal framework
- the Open Bank Resolution Scheme (OBR), which reflects a reduced
propensity of the New Zealand government to support financial
institutions.
The Support Rating and Support Rating Floor are sensitive to any
change in assumptions around the propensity or ability of the New
Zealand government to provide timely support to the bank.
The rating actions are as follows:
Wairarapa Building Society (WBS):
Long-Term IDR affirmed at 'BB+'; Outlook Stable;
Short-Term IDR affirmed at 'B';
Local Currency Long-Term IDR affirmed at 'BB+'; Outlook Stable;
Local Currency Short-Term IDR affirmed at 'B';
Viability Rating affirmed at 'bb+';
Support Rating affirmed at '5'; and
Support Rating Floor affirmed at 'NF'.
*********
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 ***