/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/140829.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 Friday, August 29, 2014, Vol. 17, No. 171 Headlines A U S T R A L I A DOBBINS CONTRACTING: Ferrier Hodgson Appointed as Receivers MIDWEST VANADIUM: S&P Withdraws 'D' CCR at Issuer's Request NCSS MAINTENANCE: Smith Hancock Appointed as Administrators QANTAS AIRWAYS: Posts AUD2.84-Bil. Loss For Year Ended June 30 * Queensland Farms Up for Sale Because of Huge Farmer Debt * ASIC Releases Updated Policy for Externally Administered Firms C H I N A COUNTRY GARDEN: Drops Most in Five Months on Rights Offer HILONG HOLDING: Weak 1H 2014 Results No Impact on Moody's Ba2 CFR MAOYE INTERNATIONAL: S&P Revises Outlook to Neg.; Affirms BB+ CCR SOUND GLOBAL: Solid 1H 2014 Results Supports Moody's Ba3 CFR YINGDE GASES: Fitch Assigns 'BB' Rating to USD250MM Sr. Notes I N D I A ADITYA CAR: CRISIL Reaffirms 'B' Rating on INR55MM Cash Credit ALCHEMIST LTD: CRISIL Reaffirms 'B+' Rating on INR143MM Term Loan AMRUTVAHINI SHETI: CRISIL Puts 'B' Rating on INR84MM Term Loan ARC INSULATION: CRISIL Suspends 'D' Rating on INR32.5MM Term Loan CHARMS CHEM: ICRA Assigns 'C' Rating to INR3.5cr Cash Credit COSMAS PHARMACLS: INR120M Cash Credit CRISIL C Rating Reaffirmed COSMAS RESEARCH: CRISIL Reaffirms D Rating on INR510MM Term Loan ELITE VEHICLES: CRISIL Assigns 'B' Rating to INR90MM Cash Credit GALAXY MACHINERY: CRISIL Reaffirms B+ Rating on INR73MM Bank Loan GEETANJALI AGRO: ICRA Reaffirms B Rating on INR7.3cr Cash Credit GLOBAL NATURE: ICRA Reaffirms B+ Rating on INR6.8cr FB Limit JIVANDHARA COTTON: ICRA Reaffirms B+ Rating on INR9cr Cash Credit KARO COILS: CRISIL Assigns 'B-' Rating to INR86.5MM Term Loan KOHINOOR CARPETS: CRISIL Reaffirms B Rating on INR32.7M Term Loan LACTON TILES: CRISIL Assigns 'B+' Rating to INR60MM Term Loan LILA HOSPITALS: ICRA Lowers Rating on INR5.40cr Term Loan to 'D' MAA ANANDAMOYEE: CRISIL Assigns 'D' Rating to INR67.5MM Term Loan MAA CHINNAMASTA: CRISIL Assigns B Rating to INR116.3MM Bank Loan METCUT TOOLINGS: CRISIL Reaffirms D Rating on INR60MM Cash Credit MITHILANCHAL INDUSTRIES: ICRA Cuts Rating on INR6cr LT Loan to D MITS MEGA: CRISIL Assigns 'B+' Rating to INR200MM Bank Loan MITTAPALLI SPINNERS: CRISIL Suspends B- Rating on INR408MM Loan MJ & SONS: CRISIL Reaffirms D Rating on INR470MM Long Term Loan NARESH KUMAR: ICRA Suspends B/A4 Ratings on INR16cr FB Limits OM SAI: CRISIL Reaffirms 'B' Rating on INR100MM Cash Credit RDS & SONS: CRISIL Assigns 'B' Rating to INR54.8MM Term Loan UNIQUE GEM: ICRA Downgrades Rating on INR50cr LT FB EBD to 'D' UTKAL REALTORS: ICRA Suspends 'B' Rating on INR30cr Term Loan VISHNU CARRIERS: CRISIL Reaffirms D Rating on INR90MM Cash Credit ZAZSONS EXPORTS: ICRA Ups Rating on INR23.2cr Packing Loan to B+ J A P A N TAKEFUJI CORP: BofA's Merrill Japan Ordered to Pay Damages M A L A Y S I A MALAYSIA AIRLINES: Shares Suspended Ahead of Revamp Announcement MALAYSIA AIRLINES: Exec Chair Appointment Maybe Included in Plan MALAYSIA AIRLINES: MAS Denies 'Empty Flight' Report N E W Z E A L A N D METRO BAR: Bar Owner Faces Five-year Ban Bid from Running Cos. * MALCOLM SHEARER: Settles Debt to Avoid Bankruptcy S O U T H K O R E A MAGNACHIP SEMICONDUCTOR: S&P Lowers CCR to B+; Outlook Negative X X X X X X X X * Large Companies with Insolvent Balance Sheets - - - - - ================= A U S T R A L I A ================= DOBBINS CONTRACTING: Ferrier Hodgson Appointed as Receivers ----------------------------------------------------------- Ryan Eagle and Morgan Kelly of Ferrier Hodgson were appointed as Receivers and Managers to the assets and undertakings of Dobbins Contracting Pty Limited & Dobcon Group Pty Limited on Aug. 27, 2014. The Receivers' appointment follows the appointment of Simon Thorn and Brad Tonks of PKF Lawler as Liquidators of Dobbins Contracting Pty Limited & Dobcon Group Pty Limited on 25 August 2014. The Receivers now control the Group's assets and undertakings. The Group ceased trading prior to the appointment of the Receivers. MIDWEST VANADIUM: S&P Withdraws 'D' CCR at Issuer's Request ----------------------------------------------------------- Standard & Poor's Ratings Services said that it had withdrawn its 'D' corporate credit rating on Australian mining company Midwest Vanadium Pty Ltd. and its 'D' issue rating on Midwest's US$335 million senior secured notes due 2018. The ratings were withdrawn at the issuer's request. A fire event saw Midwest failing to pay US$19 million of interest due in Feb. 2014. As a result, S&P lowered the ratings to 'D' on Feb. 20, 2014. The company subsequently negotiated a standstill arrangement that suspended the rights of the senior secured creditors in relation to the payment default until Aug. 2014. On Aug. 19, 2014, Midwest's parent Atlantic Ltd. announced that the February standstill arrangement was extended to Nov. 14, 2014, and that this agreement will also include the unpaid interest that was due in Aug. 2014. S&P's recovery rating on the notes at the time of the withdrawal was '5', which indicates its expectations for modest (10% to 30%) recovery for noteholders. NCSS MAINTENANCE: Smith Hancock Appointed as Administrators ----------------------------------------------------------- Michael John Morris Smith -- mikes@smithhancock.com.au -- and Peter Hillig -- peterh@smithhancock.com.au -- of Smith Hancock were appointed as administrators of NCSS Maintenance Services Pty Limited on Aug. 27, 2014. A first meeting of the creditors of the Company will be held at Chapman Room at Park Royal Hotel, 30 Phillip Street, in Parramatta, on Sept. 5, 2014, at 11:00 a.m. QANTAS AIRWAYS: Posts AUD2.84-Bil. Loss For Year Ended June 30 -------------------------------------------------------------- Qantas Airways on August 28 announced an Underlying Loss Before Tax of AUD646 million and a Statutory Loss After Tax of AUD2.8 billion for the 12 months ended June 30, 2014. The Underlying PBT result was driven by the cumulative impact of two years of industry capacity growth ahead of demand, leading to a AUD566 million decline in FY14 revenue, and by record Australian dollar fuel costs of AUD4.5 billion - up AUD253 million from FY13. In response, Qantas is driving an earnings recovery and de- leveraging the Group's balance sheet to shape a profitable future and build long-term shareholder value. The AUD2 billion accelerated Qantas Transformation program announced in February is permanently reducing costs and laying the foundations for sustainable growth in earnings. Transformation benefits totalled AUD440 million in FY14, including AUD204 million of second-half benefits from the accelerated Qantas Transformation program. A further AUD900 million of accelerated transformation projects are in the implementation phase, with more than AUD600 million of benefits from these projects to be realised in FY15. To date, projects equivalent to more than half the AUD2 billion target have been delivered or are underway. Unit costs were reduced by 3 per cent over the year, accelerating from a 2 per cent reduction in the first half to a 4 per cent reduction in the second half. Qantas CEO Alan Joyce said the underlying result had been foreshadowed at the Group's half-year announcement in February. "There is no doubt today's numbers are confronting, but they represent the year that is past," Mr. Joyce said. "We have now come through the worst. With our accelerated Qantas Transformation program we are already emerging as a leaner, more focused and more sustainable Qantas Group. "There is a clear and significant easing of both international and domestic capacity growth, which will stabilise the revenue environment. "We expect a rapid improvement in the Group's financial performance -- and a return to Underlying PBT profit in the first half of FY15, subject to factors outside our control." Significant one-off costs associated with Qantas Transformation are recognised in the statutory result, including restructuring and redundancies (AUD428 million) and primarily non-cash costs relating to early aircraft retirements (AUD394 million). Of the 5,000 redundancies announced in February, 2,500 have been implemented as at 28 August. At the same time as delivering cost reduction, the Group has taken action to adjust its capacity and network in response to shifts in demand and the competitive environment -- while retaining flexibility to make further adjustments if required. International competitor capacity growth is expected to be 2.4 per cent in the first half of FY15 and domestic market capacity growth is expected to be around 1 per cent, significantly below recent trends for both markets. Financial Position Group liquidity at June 30 was AUD3.6 billion, comprising AUD3 billion in cash -- up around AUD600 million from the half-year -- and AUD630 million in undrawn committed facilities. With operating cash flow of AUD1.1 billion, the Group was net free cash flow neutral in FY14. The Group significantly extended its debt maturity profile through two landmark bond issuances totalling AUD700 million, with no major unsecured refinancing required before April 2016. Net debt including operating lease liability was reduced by AUD96 million. Overall capital investment has been reduced to maximise net free cash flow for debt reduction, while the Group has maintained targeted investment in fleet, product and service to sustain brand and yield premiums for Qantas and Jetstar. Capital investment was AUD874m in FY14. Planned capital investment in FY15 has been reduced from AUD800 million to AUD700 million, with a forecast of AUD800m in FY16. The Group's average fleet age remains at a 20-year low of 7.7 years, with 35 per cent of the fleet debt-free. Thirty-one new debt-free aircraft have been added since FY10, including seven in FY14. Outcome of Structural Review Qantas also announced the outcomes of the structural review that commenced in December 2013. The Group has identified, valued and will continue to assess opportunities to sell non-core assets such as airport terminals, property and land holdings. Any proceeds from such sales will be used to repay debt. After detailed strategic and structural assessment of Qantas Loyalty, the decision has been made to retain this highly valuable business within the existing Group structure. It was determined that there was insufficient justification for a partial sale. Qantas Loyalty continues to offer major profitable growth opportunities. No new Jetstar ventures will be established while the Group is focused on transformation. Substantial value exists across the Jetstar Group airlines, to be realised over time. Since 2012, Qantas' international and domestic airlines have reported their financial performance as separate segments, to strengthen accountability and performance. Following the partial repeal of the Qantas Sale Act, the Group will establish a new holding structure and corporate entity for Qantas International. This decision will create the long term option for Qantas International to attract external investment and participate in partnership opportunities in the international aviation market, with a view to achieving efficiencies and improved returns to shareholders. Fleet Writedown Under accounting standards, the decision to establish a new holding structure and corporate entity for Qantas International requires a change to Qantas' Cash Generating Units (CGUs) for impairment testing. The previous'Qantas Brands' CGU has been split into four separate CGUs: Qantas International, Qantas Domestic, Qantas Loyalty and Qantas Freight. The CGUs for Qantas Domestic, Qantas Loyalty and Qantas Freight all have strong surpluses. After being tested on a standalone basis for the first time, the Qantas International CGU requires a writedown of AUD2.6 billion. The size of the writedown is largely due to the historic cost of aircraft purchased with an average exchange rate from Australian dollars to U.S. dollars of AUD0.68. This writedown is a non-cash charge, recognised in the statutory result, with no cash impact on the Group's or Qantas International's operations. It is a writedown to the carrying value of aircraft that Qantas has no intention to sell and intends to retain in its fleet. Following the writedown, the carrying value of Qantas International aircraft will be more reflective of the current market value of the fleet, and future depreciation expense will be approximately AUD200 million per year lower as a result of this change. CEO Comment Mr. Joyce said the Group's priority now was to push forward with the accelerated Qantas Transformation program after a positive start. "After an extremely difficult period, we are focused on building momentum with our turnaround in FY15," Mr. Joyce said. "Our cash balance and liquidity position is strong, and the Group's overall financial performance is rapidly improving. We are removing costs to drive earnings growth. And the work we've done over recent years to renew our fleet and improve service has been recognised with a string of awards and record customer satisfaction. "In February we made a deliberate choice to continue investing in core initiatives for customers in order to hold our competitive position, keep our brands strong and maintain a yield premium in a challenging market. As we transform our business at pace, our airlines are providing better service than ever. "The structural decisions we announce today give the Group maximum scope to attract capital in a fiercely competitive international aviation market. Standing still while the world changes around us is not an option. "With our structural review complete, we can move forward with certainty." Breakdown of Results Qantas Domestic Qantas Domestic reported Underlying EBIT of AUD30 million, down from AUD365 million in FY13. Group Underlying EBIT, including Qantas Domestic and Jetstar's domestic operations, was just below AUD50 million. The earnings deterioration in FY14 was a result of market capacity increases ahead of demand, weaker demand in the resources and government sectors, price pressure in all industries, unrecovered carbon tax costs and an unfavourable fuel cost of AUD68 million. In this volatile market, Qantas Domestic's strategy of maintaining a capacity, frequency and product advantage over the competition saw it remain Australia's premium carrier of choice. The airline held an 80 per cent share of the domestic corporate travel market by revenue, including 48 new accounts, eight accounts won back from the competition, 10 accounts lost and 182 accounts renewed. Comparable unit costs were reduced by 3 per cent as Qantas Transformation benefits began to flow, helping close the cost gap with the competition. Both customer satisfaction and customer advocacy were at record levels in FY14, helped by Qantas Domestic's consistently superior on-time performance. Qantas Domestic was Australia's most punctual major domestic airline every month in FY14 and, as at June 2014, had led the competition for 18 straight months -- a key factor in winning and retaining corporate accounts. Qantas International Qantas International reported an Underlying EBIT loss of AUD497 million, compared with a loss of AUD246 million in FY13. The business delivered another strong year of cost reduction, cutting comparable unit costs by 4 per cent, and has now realised more than AUD400 million of transformation benefits over the past two financial years. However, these benefits were offset in FY14 by competitor capacity growth of 9.5 per cent -- well above demand -- and record fuel costs. Fuel price and foreign exchange movements hit Qantas International hardest of any of the Group's businesses, with an impact of AUD142 million. Between FY09 and FY14, competitor capacity growth in the Australian international market was 44 per cent, compared with global growth of 29 per cent. Importantly for the Group's outlook, capacity expansion is now slowing, with expectations for competitor growth of 2.4 per cent in the first half of FY15. By optimising its network and fleet, including the retirement of older Boeing 747s, Qantas International is cutting unit costs while improving the travel experience for customers. Retiming the QF9/10 services to Dubai and London, for example, has freed up an A380 to operate on the popular Dallas/Fort Worth route and will lead to a significant increase in asset utilisation. Customer satisfaction reached record levels in FY14 and customer advocacy was a record for the year. New lounges were opened in Singapore, Hong Kong and Los Angeles, while new and expanded codeshare agreements were struck with China Southern, LAN and Bangkok Airways. These agreements complement the ground-breaking Qantas-Emirates partnership launched in FY13. The Dubai route continues to receive the highest customer satisfaction anywhere on the Qantas International network, with more than 2 million Qantas customers having already travelled through the hub since the partnership was launched. Qantas International now offers its biggest ever global network, with 1,200 destinations available with Qantas and its partner airlines. Jetstar The Jetstar Group reported an Underlying EBIT loss of AUD116 million, down from Underlying EBIT of AUD138 million in FY13. Controllable unit costs were reduced by 2 per cent. However, these gains were offset by an unfavourable fuel cost of AUD86 million, a yield decline of AUD113 million across the highly competitive South East Asian and Australian markets and an increase in associate start-up losses of AUD20 million. Total associate start-up losses in Asia were AUD70 million due primarily to the rapid expansion of Jetstar Japan as it consolidates its leading LCC position in the Japanese domestic market. Jetstar's domestic business in Australia remained profitable -- as it has been every year since launch in 2004 -- and continued to play its part in the Group's successful two-brand strategy. Customer satisfaction remains at record levels in Jetstar Airways' domestic and international operations, helped by continued improvement in on-time-performance and the introduction of the Dreamliner on key international routes, including Bali, Phuket and Bangkok. The Jetstar Group airlines in Asia, in which Qantas is a minority investor, remain focused on distinct market priorities: * Growth at Jetstar Asia has been suspended in a very challenging Singapore market that saw capacity expand by 23 per cent in FY14, but the business made productivity gains, holds a substantial yield premium to its LCC competitors, and is ranked the nation's leading LCC. Its performance is expected to improve as capacity growth moderates, with market correction already underway. * Jetstar Japan is Japan's largest and fastest growing LCC, having carried over 5 million passengers since launch and opened a second domestic base in Osaka. The launch of operations from the second base is improving unit cost performance, as a result of increased asset utilisation from the 24-hour airport in Osaka. With LCCs still holding just 6 per cent of the Japanese domestic market, the business has significant growth potential. * Vietnam's Jetstar Pacific cut unit costs and increased customer advocacy in a high-growth market. The business has completed its recapitalisation, has begun international services and will expand its fleet from 7 to 10 aircraft by December 2014. * The Board and management of Jetstar Hong Kong continue to work with local regulators towards gaining approval to begin operations. Qantas Loyalty Qantas Loyalty reported record Underlying EBIT of AUD286 million - - up from AUD260 million in FY13 -- after a fifth straight year of double-digit earnings growth. The business continued to perform strongly in FY14, reaching 10.1 million Qantas Frequent Flyer members by 30 June 2014, and award redemptions rose 11 per cent to 6.2 million. Qantas Frequent Flyer billings increased by 8 per cent. Fourteen new program partners were added during the year, increasing options for members to earn points. Alongside the continued success of Qantas Frequent Flyer, the broader Qantas Loyalty business expanded into new ventures through the successful launch of the Aquire loyalty program for SMEs and the Qantas Cash travel money card. More than 35,000 businesses have signed up to Aquire and there have been more than 300,000 Qantas Cash activations since the product's launch, with AUD500 million in cash loaded onto the card. Qantas Cash was also awarded the maximum five-star rating in its category by CANSTAR. A new digital channel, Qantaspoints.com, provides a dedicated one- stop resource for Qantas Frequent Flyer and Aquire members. Qantas Freight Qantas Freight reported Underlying EBIT of AUD24 million, compared with AUD36 million in FY13. Earnings were lower as a result of the sale of Star Track Express in FY13, while global air cargo markets remained challenging. However, the integration of Australian air Express with Qantas Freight is now complete and full run-rate benefits began to flow in the second half of FY14. Outlook The Group expects a return to an Underlying Profit Before Tax in the first half of FY15, subject to factors outside its control. This is based on the following expectations: * A target of AUD300 million of Qantas Transformation benefits to be realised in the first half. * A stabilising operating environment, as market capacity growth subsides. * First half fuel costs in line with the first half of FY14. * The repeal of the carbon tax. * Reduced depreciation costs compared with the first half of FY14. Headquartered in Sydney, Australia, Qantas Airways Limited -- http://www.qantas.com.au/-- is an Australian airline company engaged in the operation of international and domestic air transportation services, and the provision of time definite freight services. Qantas is also engaged in the sale of international and domestic holiday tours, and associated support activities, including flight training , catering, passenger and ground handling, and engineering and maintenance. It is organized into four segments: Qantas, Jetstar, Qantas Holidays and Qantas Flight Catering. As reported in the Troubled Company Reporter-Asia Pacific on March 3, 2014, Moody's Investors Service said Qantas Airways Limited's half year results to Dec. 30, 2013, are credit negative though broadly within expectation and have no immediate impact on its Ba1 corporate family rating, Ba2 senior unsecured long term rating or non-prime (NP) short term rating. The outlook for Qantas' ratings remains negative. The TCR-AP reported on Jan. 27, 2014, that Standard & Poor's Ratings Services affirmed its'BB+' long-term issue rating on Qantas Airways Ltd.'s senior unsecured debt, in line with the corporate credit rating. At the same time, S&P assigned a recovery rating of'3', indicating its expectation of meaningful (50%-70%) recovery for creditors in the event of a payment default. S&P has also removed the senior unsecured debt from CreditWatch with negative implications, where it was placed on Dec. 5, 2013. * Queensland Farms Up for Sale Because of Huge Farmer Debt --------------------------------------------------------- Cliff Sanderson at Dissolve.com.au reports that a farm in Meandarra, Queensland, has been placed into receivership and is on the market as four different properties or individual farm with their own dams, house and sheds. Agent Ray White has been appointed by receiver PPB Advisory to sell the properties, the report says. * ASIC Releases Updated Policy for Externally Administered Firms ---------------------------------------------------------------- ASIC on Aug. 25, 2014, released a consultation paper on relief for externally administered companies and registered schemes being wound up. ASIC Commissioner, John Price said, "We want public comments on our proposals to reduce business costs for insolvent or financially distressed companies and registered schemes while recognising the information needs of members and creditors of financially distressed entities. ASIC also wants to ensure that companies that cease being externally administered comply with their financial reporting obligations if they are going to continue to carry on business. Key points from Consultation Paper 223 Relief for externally administered companies and registered schemes being wound up: * ASIC proposes to update its approach to financial reporting relief for externally administered companies and registered schemes being wound up. * We want to establish policy settings that appropriately balance the information needs of members and other users of financial reports with the financial burden imposed on distressed entities by financial reporting costs. * ASIC is consulting on some possible practical improvements it can make to our policy to test whether they will achieve that appropriate balance. In particular, we are consulting on proposals whether we should: * expand our policy to exempt insolvent registered schemes being wound up from financial reporting * expand our policy to exempt public companies from the obligation to hold an AGM if the company has a liquidator appointed, and * update our guidance on the circumstances in which we will provide individual relief, including narrowing the circumstances in which we give exemptive relief and expanding the circumstances in which we give deferral relief." Mr. Price said, "Given that external administrations of companies and the winding up of registered schemes raise competing policy issues, we have prepared a detailed consultation paper to assist companies, members, Australian financial services licensees (including responsible entities), creditors and insolvency practitioners in providing their feedback. We welcome submissions from interested parties and hope to finalise our revised regulatory guide and class order in early 2015." Submissions close Oct. 20, 2014. ========= C H I N A ========= COUNTRY GARDEN: Drops Most in Five Months on Rights Offer --------------------------------------------------------- Joshua Fellman and Michelle Yun at Bloomberg News report that Country Garden Holdings Co., controlled by China's richest woman Yang Huiyan, fell the most in five months in Hong Kong trading on a plan to sell new shares, underscoring liquidity concerns at Chinese developers amid a slowing housing market. Shares of Country Garden, based in based in Foshan, Guangdong province, fell as much as 7.2 percent, the most since March 19, to HK$3.36, They fell 6.1 percent to HK$3.40 as of 11:02 a.m., August 27. The offering is priced at about a 31 percent discount to August 26's closing price of HK$3.62 a share. Bloomberg says Country Garden's rights offer comes as Chinese developers face difficulties in meeting their sales targets after sluggish sales and an oversupply in second- and third-tier cities drove prices lower. The report relates that the company said on August 27 it plans to raise HK$3.18 billion ($410 million) in a discounted share sale to refinance debt, including notes maturing next month. "The rights issue sends a negative message to the market about poor cash and cost management," BNP Paribas SA analysts Ronney Cheung and Wee Liat Lee said in a note on August 28. Country Garden will offer investors one new share for every 15 held, or about 1.27 billion new shares, at HK$2.50 each, according to a Hong Kong stock exchange filing cited by Bloomberg. Country Garden said it doesn't need shareholders approval to go ahead with the rights offer, the report notes. According to Bloomberg, Goldman Sachs Group Inc. and JPMorgan Chase & Co. (JPM), which are underwriting the share sale, will loan $400 million to the company to cover the gap between the Sept. 10 maturity of $375 million of 11.75 percent senior notes and Oct. 16, when Country Garden said it expects to receive the rights-offer proceeds. Bloomberg relates that Country Garden said it plans to repay the bridge loan immediately on receiving the funds from the stock sale. The developer's shares declined 23 percent this year to yesterday [August 27] and are trading at a price-to-earnings ratio of 5.1 times, according to data compiled by Bloomberg. The benchmark Hang Seng Index is up 7.3 percent this year and rose 0.4 percent today [August 28]. Country Garden's 2019 bonds denominated in the U.S. currency had fallen 0.74 cents on the dollar to 104.28 as of yesterday [August 27] from 105.02 on July 28, their highest since issuance in May, according to data compiled by Bloomberg. HILONG HOLDING: Weak 1H 2014 Results No Impact on Moody's Ba2 CFR ----------------------------------------------------------------- Moody's Investors Service says that Hilong Holding Limited's weaker financial results in 1H 2014 have no impact on its Ba2 corporate family rating, or stable rating outlook. "Hilong's financial leverage increased significantly in 1H 2014 due to weaker profit margins and increased debt levels to support its new offshore engineering services business," says Chenyi Lu, a Moody's Vice President and Senior Analyst. "Nevertheless, this increase in financial leverage was largely in line with Moody's expectation and continues to position the company in the Ba2 rating category," adds Lu. Hilong's adjusted debt/EBITDA rose to around 3.1x for the 12 months to 30 June 2014 from 1.7x in 2013, as its adjusted debt grew to RMB2.2 billion at end-June 2014 from RMB1.3 billion at end-2013, and adjusted EBITDA margin fell to 27.6% in 1H 2014 from 32.2% in 1H 2013. The weaker earnings were owing to the costs it incurred related to its new offshore engineering services business and the acquisition of Texas Internal Pipe Coating, LLC. (unrated) in March 2014. Moody's expects Hilong's adjusted debt/EBITDA to remain at around 3.0x over the next 12-18 months, driven by increased earnings and offset by additional debt to pay for its third installment payment in 2H 2014 for its acquired vessel. The increased earnings will be driven by: (1) an expected 10% year-on-year growth in revenue, which will be underpinned by increasing project launches in China in 2H 2014; and (2) a slight improvement in its EBITDA margin in 2H 2014 versus 1H 2014, owing to higher operating efficiency. Based on Hilong's results announcement for 1H 2014, its revenue grew only 1.4% year-on-year to RMB1.18 billion from RMB1.17 billion in 1H 2013, because the solid revenue growth in the oilfield services business was offset by weakness in the line pipe technology and services business and the delays in exploration and production spending by certain oil and gas companies in China. Hilong's liquidity profile remains adequate, underpinned by its expected operating cash flows of RMB250 million over the next 12 months and cash and cash equivalents of RMB731 million at end-June 2014. The company also had undrawn committed credit facilities of RMB1.0 billion at end-June 2014. These cash sources are sufficient to cover its short-term maturing debt of RMB642 million and the projected capital expenditure of RMB1.0 billion over the next 12 months. The principal methodology used in this rating was Global Oilfield Services Rating Methodology published in December 2009. Hilong Holding Limited is an integrated oilfield equipment and services provider. It has four main businesses: oilfield equipment manufacturing and services, line pipe technology and services, oilfield services, and offshore engineering services. Its shares were listed on the Hong Kong Stock Exchange in 2011. Mr. Jun Zhang, the chairman and founder of the company, is the controlling shareholder, with a 59.7% equity interest at end-2013. MAOYE INTERNATIONAL: S&P Revises Outlook to Neg.; Affirms BB+ CCR ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on China-based department store operator Maoye International Holdings Ltd. to negative from stable. At the same time, S&P affirmed its 'BB+' long-term corporate credit rating on Maoye and its 'BB' long-term issue rating on the company's senior unsecured notes. In line with the outlook revision, S&P lowered its long-term Greater China regional scale rating on Maoye to 'cnBBB' from 'cnBBB+' and on the notes to 'cnBBB-' from 'cnBBB'. S&P revised the outlook because Maoye's leverage has deteriorated and is unlikely to significantly improve over the next 12 months. The company's leverage was 3.8x at the end of 2013 and could breach 4.0x, S&P's downgrade trigger for the rating, at the end of 2014. "Management's ability to maintain leverage below 4.0x is uncertain, in our opinion, because of a challenging outlook for the property sector," said Standard & Poor's credit analyst Lillian Chiou. "Slower sales of non-core property projects than we expected contributed to the increase in leverage. Maoye's inventory of completed properties and properties under development increased 16% to Chinese renminbi (RMB) 5.4 billion at the end of 2013. These projects are largely debt-funded." "However, we believe Maoye's management has the flexibility to adjust capital spending and accelerate property sales to lower its outstanding debt. The large and stable cash flow from Maoye's concessionaire business model and the company's good cost management are additional supports. In our base case, we expect Maoye will manage its property inventory with more moderate expansion. Based on these factors, we assess the company's financial risk profile as "significant" despite the credit metrics weakening toward the lower end of the range commensurate with the category," S&P noted. In S&P's view, Maoye's revenue could increase despite a weak retail market. This is mainly because S&P expects the company to recognize RMB800 million-RMB1,000 million in property sales in 2014. As a result, the share of property sales in total revenue will increase to about 20% from 12% in 2013. S&P expects Maoye's gross sales proceeds and same-store sales to decline moderately in 2014 due to the weak consumer sentiment, a slowing Chinese economy, and competition from e-commerce. The company's high portfolio of self-owned properties and flexible operations should temper the impact of weakening sales. S&P expects Maoye to face higher risk of oversupply of the retail space because its stores are in lower-tier cities, where the oversupply is more acute. S&P has therefore revised its assessment of the company's business risk profile to "fair" from "satisfactory." Besides, the company continues to be exposed to a highly fragmented retail industry with strong competition. Maoye's good positions in niche markets and strong operational cash flow generation from the concessionaire model partly offset the challenges. "The negative outlook reflects our view that Maoye's leverage is unlikely to significantly improve over in the next 12 months and could exceed 4.0x, our downgrade trigger. We believe the management can manage its financial leverage by accelerating property sales and controlling capital spending. A prudent approach to managing property inventory and capital could support a lower leverage over the next 12 months," Ms. Chiou said. S&P could lower the rating if Maoye's ratio of debt to EBITDA remains above 4.0x over the next 12 months. This could happen if: (1) the company's propertysales are slower and inventory is higher than we expect; (2) Maoye takes on more aggressive debt-funded expansion than our base-case assumption; or (3) EBITDA margin declines materially because of the competition in the retail market and a sharp increase in lower-margin property sales. S&P could revise the outlook to stable if Maoye prudently manages its inventory and capital, such that its debt-to-EBITDA ratio stays below 4x and continues to improve. SOUND GLOBAL: Solid 1H 2014 Results Supports Moody's Ba3 CFR ------------------------------------------------------------ Moody's Investors Service says that Sound Global Limited's solid 1H2014 results support its Ba3 corporate family rating and B1 senior unsecured rating as well as the stable rating outlook. "Sound Global's solid year-on-year revenue growth and slightly improved profit margins in 1H 2014 were in line with Moody's expectations, and were mainly driven by the continued strong demand for its core water treatment business in China," says Chenyi Lu, a Moody's Vice President and Senior Analyst. The company's revenue rose by 10.9 % year-on-year to RMB1.63 billion in 1H 2014, from RMB1.47 billion in 1H 2013. The increase was underpinned by solid demand for its turnkey engineering, procurement and construction services regarding water treatment works, and a greater contribution from its operation and maintenance business. Moody's expects the company's revenue to grow around 12% year-on- year in 2014, given the continued strong demand for water treatment as environmental protection continues to gain importance in China. In addition, Sound Global's adjusted EBITDA margin increased to 29.0% in 1H 2014 from 27.8% in 1H 2013, owing to its improved operating efficiency. Given its solid market position, Moody's expects the company to maintain the current level of profitability in all of 2014. Sound Global also reduced its debt leverage. The company returned to a net cash position of RMB196 million at end-June 2014 from a net debt position of RMB233 million at end-2013, because of the full conversion of its convertible bonds of RMB573 million in 1H2014. "Despite a moderate weakening in its financial leverage due to increased investments, Sound Global's financial profile will remain in line with its ratings," adds Lu. Sound Global will increase investments in its build, operate & transfer projects. As such, Moody's expects Sound Global's adjusted net debt/EBITDA to return to around 0.5x over the next 12-18 months, which will still support its Ba3 corporate family rating. Sound Global's liquidity profile remains strong. At end-June 2014 it had unrestricted cash on hand of RMB3.8 billion, which can fully cover its short-term maturing debt of RMB1 billion. The principal methodology used in this rating was Global Construction Methodology published in November 2010. Established in 2005, Sound Global Limited is one of the leading providers of turnkey water and wastewater treatment solutions in China. The company was listed on the Hong Kong Stock Exchange in 2010 Hong Kong and was founded by Mr. Wen Yibo. YINGDE GASES: Fitch Assigns 'BB' Rating to USD250MM Sr. Notes ------------------------------------------------------------- Fitch Ratings has assigned Yingde Gases Group Company Limited's (Yingde; BB/Stable) USD250m 7.25% senior unsecured notes due 2020 a final rating of 'BB'. The notes are issued by Yingde Gases Investment Limited and are unconditionally and irrevocably guaranteed by Yingde. This final rating follows the receipt of documents conforming to information already received and is in line with the expected rating assigned on Aug. 21, 2014. KEY RATING DRIVERS Utility Type Business: Yingde's on-site gas supply business, which accounted for 88% of revenue in 2013 (87.9% in 2012), generates stable cash flow similar to that seen in utility companies. This business benefits from the cost pass-through and minimum off-take mechanisms in the long-term contracts between Yingde and its on- site customers. In 2013, Yingde increased the number of its production facilities from 41 to 57, and expanded its total installed oxygen capacity by 50% to 1.6 million normal cubic metres of gas per hour (Nm3/hr). It is scheduled to increase its oxygen capacity to 2 million Nm3/hr at end-2014. Stable Profitability: Yingde enjoys more stable profitability relative to peers due to the high contribution from its on-site business. Operating profit margin was stable at 22% for both 2013 and 2012. Gross profit has risen in tandem with growing capacity. Yingde's competitors, in comparison, tend to have more unpredictable earnings profiles as they have higher exposure to the merchant gas sales segment, which has higher gross margins but is subject to more volatile demand and pricing. Improved Long-term Funding Sources: Yingde's improving access to various funding sources has given it greater financial flexibility to fund its projects on hand. At end-2013, only CNY1.2bn out of CNY7bn in total borrowings were classified as current, compared with CNY3.3b out of CNY6.1b in total borrowings a year earlier, showing that Yingde has significantly improved its access to long- term funding from lenders. Negative FCF Constrains Ratings: High capex over the next two to three years will put Yingde in negative free cash flow (FCF) before 2016. Yingde is still at an expansionary stage and its cash flow will be insufficient to fully fund its capex unless capex stabilises at CNY2bn by 2016. The high capex has caused funds from operations (FFO) net leverage to rise to 4.3x in 2013, above the 3.5x level at which Fitch may consider negative rating action. However, Fitch expects this to be temporary. Higher capex in 2012 and 2013 will result in higher cash flow generation from 2014 and enable Yingde to deleverage to below 3.5x after 2015. Small by Global Standards: The international industrial gases sector is dominated by top international players who have strong market positions in the merchant market and the financial strength to compete in the on-site business. Although Yingde has a stronghold in the Chinese on-site segment, the scale of the company is still small by global standards. RATING SENSITIVITIES Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- deterioration of Yingde's business profile demonstrated by falling cash gross profit per unit for the on-site gas supply business -- failure to secure long-term funding for future growth -- FFO adjusted net leverage being sustained above 3.5x, or higher than 4.5x in any single year Positive: Positive rating action is not expected in the next 12-18 months due to Yingde's high capex needs and negative FCF. However, future developments that may, individually or collectively, lead to positive rating action include: -- significant increase in business scale without deterioration in financial metrics -- positive FCF on a sustained basis ========= I N D I A ========= ADITYA CAR: CRISIL Reaffirms 'B' Rating on INR55MM Cash Credit -------------------------------------------------------------- CRISIL's rating on the long-term bank facilities of Aditya Car Care Pvt Ltd continues to reflect ACCPL's modest financial risk profile, marked by high total outside liabilities to total net worth ratio (TOLTNW), and moderate debt protection measures, its low bargaining power with its principal, and its exposure to intense competition in the automobile market. These rating weaknesses are partially offset by the extensive experience of ACCPL's promoter in the automobile dealership business in Odisha. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 55 CRISIL B/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 10 CRISIL B/Stable (Reaffirmed) Term Loan 60 CRISIL B/Stable (Reaffirmed) Outlook: Stable CRISIL believes that ACCPL will continue to benefit over the medium term from its association with its principal, Hyundai Motor India Ltd (HMIL; rated 'CRISIL A1+'), and its promoter's extensive experience in the automobile dealership business. The outlook may be revised to 'Positive' if ACCPL records a larger-than-expected increase in revenues or profitability, or if there is substantial equity infusion, resulting in an improvement in its financial risk profile. Conversely, the outlook may be revised to 'Negative' if the company reports lower-than-expected cash accruals, or undertakes a large debt-funded capital expenditure programme, leading to deterioration in its financial risk profile, particularly its liquidity. ACCPL, promoted by Mr. Aditya Patra, is a dealer of HMIL vehicles in Odisha. It has a showroom and service centre in Tamando (near Bhubaneshwar, Odisha). The company commenced operations in November 2011. The company also has rural sales outlets in Puri and Nayagarh. ALCHEMIST LTD: CRISIL Reaffirms 'B+' Rating on INR143MM Term Loan ----------------------------------------------------------------- CRISIL's ratings on the bank facilities of Alchemist Ltd (AL; part of the Alchemist group) continue to reflect the continuous decline in the Alchemist group's operating profitability, its large working capital requirements, and its high gearing. These rating weaknesses are partially offset by the group's long track record in the food-processing and pharmaceutical industries with an established clientele, and its healthy debt protection metrics. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 35 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 127 CRISIL B+/Stable (Reaffirmed) Proposed Short Term Bank Loan Facility 20 CRISIL A4 (Reaffirmed) Term Loan 143 CRISIL B+/Stable (Reaffirmed) For arriving at the ratings, CRISIL has combined the business and financial risk profiles of AL and its subsidiaries, Alchemist Foods Ltd, Alchemist Enterprise (S) Pte Ltd, Alchemist Hospitality Group Ltd (AHGL), and Alchemist Infrastructures Pvt Ltd, together referred to as the Alchemist group. This is because these subsidiaries are wholly owned by AL, and all the companies are under a common management. Outlook: Stable CRISIL believes that the Alchemist group will continue to benefit over the medium term from its long track record in the pharmaceutical and food-processing industries and its well- diversified operations. The outlook may be revised to 'Positive' if the group generates higher-than-expected cash accruals, backed by a significant improvement in its operating margin while sustaining its revenue growth and improving its working capital management. Conversely, the outlook may be revised to 'Negative' in case of lower-than-expected revenue, a further decline in the group's operating margin, or further weakening of its capital structure, most likely on account of large debt-funded capital expenditure. The ratings are also sensitive to the continued financial support to the Alchemist group from KDS Corporation Pvt Ltd. AL was initially established as a private limited company in 1988 by Dr. K D Singh under the name, Toubro Infotech & Industries Ltd (TIIL). TIPL was reconstituted as AL when it came out with its initial public offering in 1994. AL has grown into a diversified corporation with operations in chemical trading, pharmaceuticals, food-processing, floriculture, and steel. AFL, a wholly owned subsidiary of AL, was hived off from AL in 2009. AFL is a farm-to-fork company engaged in poultry breeding and hatching, and sale of raw and value-added meat products through its retail chain, Republic of Chicken. AFL's portfolio includes whole birds, eggs, chicken cuts, boneless breasts, boneless leg meat, sausages and other cold cuts, and ready-to-eat poultry products. AMRUTVAHINI SHETI: CRISIL Puts 'B' Rating on INR84MM Term Loan -------------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable' rating to the bank facilities of Amrutvahini Sheti & Shikshan Vikas Sanstha. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 84 CRISIL B/Stable Overdraft Facility 47.5 CRISIL B/Stable Proposed Long Term Bank Loan Facility 18.5 CRISIL B/Stable The rating reflects ASSVS's stretched liquidity resulting from cash flow mismatch on account of delays in receipt of funds from the Maharashtra government and use of cash accruals mainly to fund continuous capital expenditure (capex). The rating also factors in the trust's susceptibility to regulatory changes in the education sector and to changing student preferences amid intense competition. These rating weaknesses are partly offset by the long-standing presence and established position of the trust's institutes in the education sector and its comfortable capital structure. Outlook: Stable CRISIL believes that ASSVS will benefit from its institutes' long- standing presence and established position in the education sector. The outlook may be revised to 'Positive' if ASSVS improves its liquidity on a sustainable basis, driven by prudent cash flow management and substantial cash accruals. Conversely, the outlook may be revised to 'Negative' if the trust undertakes any considerably large capex programme or witnesses decline in demand, or if any regulatory ruling adversely affects its operations. ASSVS was established in 1978 by the late Mr. Bhausaheb Thorat. It has established 10 educational institutions over a 110-acre campus in Sangamner (Maharashtra). It provides school, dental, engineering, and management courses. For 2013-14 (refers to financial year, April 1 to March 31), on a provisional basis, ASSVS reported a surplus of INR58.1 million on total income of INR396.3 million; the trust reported a surplus of INR36.6 million on total income of INR340.8 million for 2012-13. ARC INSULATION: CRISIL Suspends 'D' Rating on INR32.5MM Term Loan ----------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of ARC Insulation & Insulators Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 16.5 CRISIL D Suspended Term Loan 32.5 CRISIL D Suspended The suspension of ratings is on account of non-cooperation by ARC with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, ARC is yet to provide adequate information to enable CRISIL to assess ARC's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings'. Incorporated in 2000, ARC manufactures fibreglass reinforced plastic (FRP) and glass fibre rebars (GFRP). Its manufacturing facility is located in Ramdeopur (West Bengal). ARC's daily operations are looked after by its promoter-director. Mr.Manish Bajoria. CHARMS CHEM: ICRA Assigns 'C' Rating to INR3.5cr Cash Credit ------------------------------------------------------------ ICRA has assigned the [ICRA]C rating to the INR3.0 crore Term Loan facilities and INR3.5 crore Cash Credit facility of Charms Chem Private Limited. ICRA has also assigned the [ICRA]A4 rating to the INR0.5 crore short term non-fund based facilities of CCPL. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term, fund 3.00 [ICRA]C Assigned based limits- Term Loans Long term, fund 3.50 [ICRA]C Assigned based limits- Cash Credit Short term, non- 0.50 [ICRA]A4 Assigned fund based limits Letter of Credit The assigned ratings take into consideration niche business profile of the company giving rise to healthy profitability and future demand prospects. The ratings are however constrained by weak financial risk profile of the company characterized by stretched liquidity position. CCPL has policy of stocking high inventory and the same coupled with uncertainties in order inflows has impacted liquidity position of the company. ICRA also takes note of small scale of operations of the company and vulnerability to seasonality in raw material prices. Going forward, regularizing debt servicing and improvement in working capital management will remain key rating sensitivities. Charms Chem Private Limited was incorporated in 2001 promoted by Mr. Milind Honavar and Mrs. Sangeeta Honavar as a producer and supplier of anti-cancer ingredients to pharmaceutical companies. The company has two manufacturing units located in Kurkumbh MIDC and Jejuri near Pune. The Kurkumbh plant was setup in 2001, while the Jejuri plant was bought by the company in 2009 alongwith all the existing manufacturing machineries. The intermediates produced by the company in the Kurkumbh plant are mainly anti-cancer intermediates used in the production of oncology drugs. In 2007, the company has setup an office cum R&D facility in Hadapsar area of Pune. The total employee strength of the company is ~80 on roll of the company. COSMAS PHARMACLS: INR120M Cash Credit CRISIL C Rating Reaffirmed ---------------------------------------------------------------- CRISIL's ratings on the bank facilities of Cosmas Pharmacls Ltd (CPL; part of the Cosmas group) continue to reflect CPL's stretched liquidity on account of significant fund outflow to its subsidiary Cosmas Research Labs Ltd. CPL also has modest scale of operations in the intensely competitive pharmaceuticals industry. These rating weaknesses are partially offset by its promoters' extensive industry experience. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 120 CRISIL C (Reaffirmed) Inland/Import Letter 40 CRISIL A4 (Reaffirmed) of Credit Proposed Long Term 20 CRISIL C (Reaffirmed) Bank Loan Facility For arriving at the ratings, CRISIL has combined the business and financial risk profiles of CPL and its subsidiary CRL. The two companies, together referred to as the Cosmas group, are engaged in similar lines of business, and have financial fungibility and a common management. Update The Cosmas group reported provisional operating income of INR1.1 billion for 2013-14 (refers to financial year, April 1 to March 31) vis-a-vis INR1.4 billion for 2012-13. The operating income declined primarily because of limited fund availability driven by stretched debtors for new orders and the management's efforts to reduce trading of active pharmaceutical ingredients (APIs). The group has orders of around INR100 million in hand, to be executed in three months. The group reported provisional profit after tax of INR7.5 million for 2013-14, against loss of INR2.9 million for 2012-13. Its operating margin dipped to 9.4 per cent in 2013-14 from 12.6 per cent in 2012-13 primarily because of sluggish market conditions and limited bargaining power with customers. The group's liquidity is stretched, mainly on account of delay in operations of CRL's oncology segment (CPL diverted its own funds to, and contracted a loan for, CRL). The receipt of requisite approvals for exports is also awaited. The oncology segment is expected to be operational by January 2015. The group is trying to introduce strategic investors in CRL (expected to infuse around INR200 million). The successful commencement of the oncology segment, and timeliness and extent of infusion of funds will remain key rating sensitivity factors. The group generated estimated small net cash accruals of INR50 million and had fully utilised bank lines in 2013-14. Its gearing is estimated at 2.75 times as on March 31, 2014, and interest coverage ratio is estimated at 1 time for 2013-14. The group's working capital requirements are large, marked by debtors of 130 days as on March 31, 2014, and are expected to remain at a similar level because of its limited bargaining power. Hence, its financial risk profile is expected to remain below average over the medium term. CPL, incorporated in 1995, is involved in contract manufacturing in the beta lactam segment. Its facility is in Baddi (Himachal Pradesh). CRL, incorporated in 2010, is involved in contract manufacturing in the beta lactam segment with facility in Ludhiana (Punjab). CRL is setting up an oncology segment. Both the entities are managed by Mr. Punit Jain and Mr. Sanjay Jain. COSMAS RESEARCH: CRISIL Reaffirms D Rating on INR510MM Term Loan ---------------------------------------------------------------- CRISIL's rating on the bank facilities of Cosmas Research Lab Ltd (CRL; part of the Cosmas group) continues to reflect instances of delay by CRL in servicing its debt; the delays have been caused by stretched liquidity driven by stretched debtors. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 130 CRISIL D (Reaffirmed) Term Loan 510 CRISIL D (Reaffirmed) Working Capital Term 50 CRISIL D (Reaffirmed) Loan CRL also has limited track record of operations and large working capital requirements. However, the company benefits from its promoters' extensive experience in the pharmaceuticals industry. For arriving at the rating, CRISIL has combined the business and financial risk profiles of Cosmas Pharmacls Ltd. with its and its subsidiary CRL. The two companies, together referred to as the Cosmas group. This is because the entities, are engaged in similar lines of business, and have financial fungibility and a common management. Update The Cosmas group reported provisional operating income of INR1.1 billion for 2013-14 (refers to financial year, April 1 to March 31) vis-a-vis INR1.4 billion for 2012-13. The operating income declined primarily because of limited fund availability driven by stretched debtors for new orders and the management's efforts to reduce trading of active pharmaceutical ingredients (APIs). The group has orders of around INR100 million in hand, to be executed in three months. The group reported provisional profit after tax of INR7.5 million for 2013-14, against loss of INR2.9 million for 2012-13. Its operating margin dipped to 9.4 per cent in 2013-14 from 12.6 per cent in 2012-13 primarily because of sluggish market conditions and limited bargaining power with customers. The group's liquidity is stretched, mainly on account of delay in operations of CRL's oncology segment (CPL diverted its own funds to, and contracted a loan for, CRL). The receipt of requisite approvals for exports is also awaited. The oncology segment is expected to be operational by January 2015. The group is trying to introduce strategic investors in CRL (expected to infuse around INR200 million). The successful commencement of the oncology segment, and timeliness and extent of infusion of funds will remain key rating sensitivity factors. The group generated estimated small net cash accruals of INR50 million and had fully utilised bank lines in 2013-14. Its gearing is estimated at 2.75 times as on March 31, 2014, and interest coverage ratio is estimated at 1 time for 2013-14. The group's working capital requirements are large, marked by debtors of 130 days as on March 31, 2014, and are expected to remain at a similar level because of its limited bargaining power. Hence, its financial risk profile is expected to remain below average over the medium term. CPL, incorporated in 1995, is involved in contract manufacturing in the beta lactam segment. Its facility is in Baddi (Himachal Pradesh). CRL, incorporated in 2010, is involved in contract manufacturing in the beta lactam segment with facility in Ludhiana (Punjab). CRL is setting up an oncology segment. Both the entities are managed by Mr. Punit Jain and Mr. Sanjay Jain. ELITE VEHICLES: CRISIL Assigns 'B' Rating to INR90MM Cash Credit ---------------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term bank facilities of Elite Vehicles Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 90 CRISIL B/Stable Term Loan 25 CRISIL B/Stable The rating reflects EVPL's weak financial risk profile, marked by a modest net worth, high external indebtedness, and weak debt protection metrics. The rating also factors in the company's modest scale, and working capital intensive nature, of operations, and the susceptibility of its operating performance to intense competition in the automobile (auto) dealership industry. These rating weaknesses are partially offset by the extensive experience of EVPL's promoter in the auto dealership industry and its established relationship with its principal, Ford India Pvt Ltd. Outlook: Stable CRISIL believes that EVPL will continue to benefit over the medium term from the extensive industry experience of its promoter and its established relationship with Ford. The outlook may be revised to 'Positive' if the company records a significant increase in its revenue while maintaining its profitability, or if there is substantial equity infusion, resulting in an improvement in its financial risk profile. Conversely, the outlook may be revised to 'Negative' if EVPL reports lower-than-expected cash accruals, or its working capital management deteriorates, leading to deterioration in its financial risk profile, particularly its liquidity. Incorporated in 2011, EVPL is an authorised dealer of passenger vehicles and spare parts of Ford. The company, promoted and managed by Mr. Gurjit Singh, operates a showroom-cum-workshop in Bengaluru (Karnataka). EVPL, provisionally, reported a profit after tax (PAT) of INR0.6 million on an operating income of INR501 million for 2013-14 (refers to financial year, April 1 to March 31); it had reported a net loss of INR11 million on an operating income of INR378 million for 2012-13. GALAXY MACHINERY: CRISIL Reaffirms B+ Rating on INR73MM Bank Loan ----------------------------------------------------------------- CRISIL's ratings on the bank facilities of Galaxy Machinery Pvt Ltd continue to reflect its weak financial risk profile, marked by a small net worth and high gearing. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 10 CRISIL A4 (Reaffirmed) Cash Credit 70 CRISIL B+/Stable (Reaffirmed) Letter of Credit 30 CRISIL A4 (Reaffirmed) Long Term Loan 17 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 73 CRISIL B+/Stable (Reaffirmed) The rating also factors in the susceptibility of GMPL's operating margin to risks related to volatility in raw material prices and intense competition in the computer numeric control (CNC) machines manufacturing segment. These rating weaknesses are partially offset by the promoters' extensive industry experience. Outlook: Stable CRISIL believes that GMPL's financial risk profile will remain constrained by its small net worth and working-capital-intensive operations, over the medium term. The outlook may be revised to 'Positive' if the company improves its liquidity with a large capital infusion, thereby enhancing its net worth. Conversely, the outlook may be revised to 'Negative' if GMPL's financial risk profile weakens with a significant decline in its profitability, or a sizable unanticipated debt-funded capacity expansion programme. Update In 2013-14 (refers to financial year April 1 to March 31), GMPL registered year-on-year growth of around 50 per cent, with a turnover of around INR300 million, thus reverting to its historic scale of operations after a decline in 2012-13. The company's profitability, however, remained constrained by competitive pressures. GMPL has a below-average financial risk profile, marked by a small net worth of around INR30 million as on March 31, 2014; the company's debt protection metrics are weak, with its interest coverage and net cash accruals to total debt (NCATD) ratios at 1.3 times and 0.04 times, respectively, for 2013-14. GMPL's operations have remained working capital intensive, with gross current assets (GCAs) of around 145 days as on March 31, 2014. The company has adequate liquidity, with moderate bank limit utilisation of 84 per cent on average during the 12 months through June 2014. GMPL will comfortably meet its debt obligations of INR2.4 million with cash accruals of around INR10 million, in 2014-15. The company does not intend to undertake any capital expenditure (capex) over the medium term; the absence of any capex will support GMPL's financial risk profile, over the period. GMPL reported a net loss of INR6.7 million on net sales of INR212.9 million for 2012-13 against a profit after tax of INR5.5 million on net sales of INR365.3 million for 2011-12. GMPL, incorporated in 1991, manufactures CNC machines. The company is promoted by by Mr. S Elango. GEETANJALI AGRO: ICRA Reaffirms B Rating on INR7.3cr Cash Credit ---------------------------------------------------------------- ICRA has reaffirmed the long term rating of [ICRA]B outstanding to the INR1.65 crore term loans, INR7.30 crore long-term fund based facilities and INR4.05 crore proposed long-term fund based facilities of Geetanjali Agro Industries. ICRA had earlier suspended the ratings in January 2014 owing to non-cooperation from the client. The suspension now stands revoked. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limits- 1.65 [ICRA]B/Reaffirmed; Term Loans suspension revoked Fund Based Limits 7.30 [ICRA]B/Reaffirmed; Cash Credit suspension revoked Fund Based Limits- 4.05 [ICRA]B/Reaffirmed; Proposed suspension revoked The rating takes comfort from the promoter's long standing experience in the rice milling and processing industry, firm's established distribution channel across domestic market, proximity of the Firm's milling unit to paddy growing areas in Raichur (Karnataka) facilitating easy procurement of raw materials and stable demand outlook with rice being an important part of the staple Indian diet. The firm's processing plant commissioned recently and is expected to ramp up its operations in the near term. The rating, however, remains constrained by the nascent stage of the Firm's operations, limited value additive nature of business and high competitive intensity owing to fragmented nature of the industry resulting in minimal pricing flexibility, vulnerability of raw material (paddy) availability to the agro- climatic conditions and stretched financial risk profile of the Firm marked by high gearing, low cash accruals and weak coverage indicators. In addition, government regulations in terms of Minimum Support Price for purchasing raw materials and Milling Levy Rate for selling a part of the produce also restrict the bargaining power of the industry players. Going forward, the firm's ability to scale up, strengthen its margins and improve its capitalization and coverage indicators would be key rating sensitivities. Established in 2011 by Mr. B. Srinivas, Mr. B. Vasanth, Mrs. B. Prasanna and Mrs. Suchitra, Geetanjali Agro Industries ("the Firm") is engaged in milling and processing of rice/paddy. The firm's major products include boiled rice, raw rice, bran, broken rice and husk. The firm commenced its operations from November, 2013 with a new plant set-up over an area of five acres in Raichur district of Karnataka with a capacity to process eight tonnes of paddy per hour. Although, the firm's operations have commenced only recently, the promoter group has been engaged in similar business for more than 15 years. The Firm in order to consolidate its entire rice milling operations under a single entity, the Firm has also merged a group entity - Geetanjali industries - which has a paddy processing capacity of three tonnes of paddy per hour. Recent results According to the unaudited results, the Firm reported a net profit of INR0.1 crore on operating income of INR27.2 crore during 2013- 14 with five months of operations during the year. GLOBAL NATURE: ICRA Reaffirms B+ Rating on INR6.8cr FB Limit ------------------------------------------------------------ ICRA has reaffirmed the long term rating of [ICRA] B+ to the INR6.8 Cr fund based limits of Global Nature Care Sangathan. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limits (TL) 6.8 [ICRA]B+ reaffirmed The reaffirmation continues to factor in the diversified revenue streams of the trust, healthy occupancy levels across the four colleges of Global Nature Care Sangathan (GNCS) and steady improvement in profitability and coverage indicators. However, the rating continues to remain constrained by high dependence on grant from the state governments to compensate for the subsidised fees for category students. Any delay in disbursal of the grant can impact the timeliness in meeting debt obligations of the trust. The ratings will remain sensitive to the trust's ability to strengthen the brand image of the colleges and improve their capacity and occupancy levels. Global Nature Care Sangathan is engaged in carrying out educational activities through multiple colleges and institutes. The institution runs a nursing college in the name of Regional Institute of Nursing, paramedical college in the name of Balaji Institute of Paramedical Sciences, Bachelor of Education college as Sardar Patel Institute of Education and an engineering college as Global Engineering & Management College. The trust is part of Global Group, which consists of other trusts managing engineering colleges outside Jabalpur. JIVANDHARA COTTON: ICRA Reaffirms B+ Rating on INR9cr Cash Credit ----------------------------------------------------------------- The rating of [ICRA]B+ has been reaffirmed for the INR9.00 crore fund based cash credit facility of Jivandhara Cotton Industries. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 9.00 [ICRA]B+ reaffirmed The rating continues to be constrained by the firm's weak financial profile as reflected by adverse capital structure along with weak debt coverage indicators. The rating also takes into account the low value additive nature of operations and intense competition on account of fragmented industry structure leading to thin profit margins. The rating is further constrained by vulnerability of profitability to adverse fluctuations in raw material prices which are subject to seasonal availability of raw cotton and government regulations on MSP and export quota. Further, JCI being a partnership firm, any significant withdrawals from the capital account would affect its net worth adversely. The rating, however, positively considers the long experience of the partners in the cotton ginning and pressing industry, positive demand outlook for cotton and cottonseed and the advantage firm enjoys by virtue of its location in cotton producing region giving it easy access to raw cotton. Established in 2006, Jivandhara Cotton Industries is engaged in cotton ginning and pressing operations. The business is owned and managed by Mr. Husain Ibrahim Kadivar, Mr. Ahmed Ibrahim Kadivar, Mr. Ibrahim Vali Kadivar and Mr. Usman Ibrahim Kadivar. The firm's manufacturing facility is located at Wankaner in Rajkot. The firm has 28 ginning machines and one pressing machine having a cumulative processing capacity of 67 TPD of raw cotton. Recent Results For the year ended 31st March, 2014, JCI reported an operating income of INR131.64 crore and profit after tax of INR0.50 crore. KARO COILS: CRISIL Assigns 'B-' Rating to INR86.5MM Term Loan ------------------------------------------------------------- CRISIL has assigned its 'CRISIL B-/Stable' rating to the bank facilities of Karo Coils Private Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 15.5 CRISIL B-/Stable Term Loan 86.5 CRISIL B-/Stable The rating of KCPL reflects its weak financial profile, small scale of operations and vulnerability related with high customer concentration in revenue profile. These weaknesses are partially offset by the promoter's experience of the automobile spring industry. Outlook: Stable CRISIL believes that the KCPL will continue to benefit over the medium term from its promoter's extensive industry experience. The outlook may be revised to 'Positive' in case of significant improvement in operating income and profitability resulting in better accruals, thus improving KCPL's financial risk profile. Conversely, the outlook may be revised to 'Negative' if the KCPL generates a lower than expected operating margin resulting in low cash accruals or undertakes significant debt-funded capex over the medium term, leading to further deterioration in its financial risk profile. Incorporated in 2006, Karo Coils Private Limited manufactures Cold Formed Coil Springs that find application in automobile sector. The day to day operations are looked after by Mr. Samvit Grover. The manufacturing facility located at Bhivadi, Rajasthan. KOHINOOR CARPETS: CRISIL Reaffirms B Rating on INR32.7M Term Loan ----------------------------------------------------------------- CRISIL's ratings on the bank facilities of Kohinoor Carpets (KC) continue to reflect KC's below average financial risk profile, marked by high gearing, small net worth, and modest debt protection metrics; the ratings also factor in the firm's small scale of operations amid intense competition in a highly fragmented industry. These rating weaknesses are partially offset by the extensive industry experience of KC's promoter. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 10 CRISIL B/Stable (Reaffirmed) Foreign Bill Exchange 70 CRISIL A4 (Reaffirmed) Packing Credit 50 CRISIL A4 (Reaffirmed) Proposed Long Term Bank Loan Facility 32.3 CRISIL B/Stable (Reaffirmed) Term Loan 32.7 CRISIL B/Stable (Reaffirmed) Outlook: Stable CRISIL believes that KC's financial risk profile, especially liquidity, will remain constrained over the medium term mainly due to its large working capital requirements and low net cash accruals. The business risk profile is, however, expected to benefit from the promoter's extensive industry experience. The outlook may be revised to 'Positive' if the firm improves its financial risk profile driven by larger-than-expected net cash accruals, or a capital infusion by the promoter leading to an improvement in its capital structure. Conversely, the outlook may be revised to 'Negative' if KC's financial risk profile deteriorates because of a decline in its revenue, or if there are sizeable capital withdrawals by the promoter, which constrains its liquidity. KC was established in 1989 by Mr. Ram Chandar Chutani. The firm manufactures and exports carpets, doormats, bath mats, and other floor coverings. KC has its own manufacturing unit for carpets in Kohand village (district Karnal, Haryana). For 2013-14, KC reported a profit after tax (PAT) of INR6.3 million on net sales of INR310.9 million, compared to a PAT of INR6.0 million on net sales of INR307.2 million for 2012-13. LACTON TILES: CRISIL Assigns 'B+' Rating to INR60MM Term Loan ------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the bank facilities of Lacton Tiles Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 60 CRISIL B+/Stable Proposed Long Term Bank Loan Facility 15 CRISIL B+/Stable Bank Guarantee 22.5 CRISIL A4 Cash Credit 27.5 CRISIL B+/Stable The ratings reflect LTPL's start-up phase and expected modest scale of operations in the highly competitive ceramics industry, and its expected large working capital requirements. These rating weaknesses are partially offset by the benefits that the company will derive from its promoters' extensive industry experience and the strategic location of its upcoming factory. Outlook: Stable CRISIL believes that LTPL will benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if LTPL stabilises its operations on time, leading to substantial cash accruals. Conversely, the outlook may be revised to 'Negative' in case of low accruals because of low order flow or profitability, or weakening of financial risk profile because of substantial working capital requirements or debt-funded capital expenditure. Incorporated in 2013, LTPL is promoted by Morbi (Gujarat)-based Mr. Devendra Bhojani, Mr. Bhavesh Bhimani, and Mr. Vallabhbhai Fefar. The company is setting up a unit to manufacture digital wall tiles. It is likely to commence commercial operations in October 2014. LILA HOSPITALS: ICRA Lowers Rating on INR5.40cr Term Loan to 'D' ---------------------------------------------------------------- ICRA has revised downwards the long term rating assigned to the INR5.40 crore term loan of Lila Hospitals Private Limited from [ICRA]B to [ICRA]D. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limits (Term Loan) 5.40 [ICRA]D downgraded The downward revision in the rating primarily takes into account LHPL's unsatisfactory track record in timely servicing of debt obligations, leading to overdue interest on term loan. ICRA notes that the project has already witnessed a significant delay, which along with the change in scope of the proposed facilities led to significant cost overrun. The rating also factors in the risks arising out of the proposed addition to facilities, not envisaged at the time of initial project planning, for which the financial closure is yet to be achieved, and the risks associated with the hiring and retention of skilled medical personnel and the scaling up of operations post commissioning. The rating, however, derives comfort from experience of the promoters in the healthcare industry and the favourable location of the project considering the lack of advanced healthcare facilities in the region. Incorporated in 2011, LHPL is in the process of setting up a 120 bed multi-speciality hospital at Behrampore, in the district of Murshidabad, West Bengal. The proposed hospital would consist of outpatient department (OPD), emergency ward, phamacy, in-house pathological lab, imaging units, dialysis unit, intensive care unit (ICU), neonatal intensive care unit (NICU), operation theatres etc. MAA ANANDAMOYEE: CRISIL Assigns 'D' Rating to INR67.5MM Term Loan ----------------------------------------------------------------- CRISIL has assigned its 'CRISIL D/CRISIL D' ratings to the bank facilities of Maa Anandamoyee Himghar Private Limited (MAHPL). The ratings reflect instances of delay by MAHPL in servicing term loan interest obligations; the delays have been caused by the company's weak liquidity. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 67.5 CRISIL D Proposed Long Term Bank Loan Facility 33 CRISIL D Bank Guarantee 1 CRISIL D Cash Credit 28.5 CRISIL D MAHPL is also exposed to a highly regulated and fragmented cold storage industry in West Bengal (WB). The rating also factors in the company's weak financial risk profile, marked by high gearing and weak debt protection metrics. These rating weaknesses are partially offset by MAHPL's promoters' extensive experience in the cold storage business. Incorporated in July 2013, MAHPL has recently set up cold storage to provide services to the potato farmers and traders. The company is based out of Hooghly (West Bengal) and is promoted by Mr. Samir Bali. MAA CHINNAMASTA: CRISIL Assigns B Rating to INR116.3MM Bank Loan ---------------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term bank facilities of Maa Chinnamasta Food Processor Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term 116.3 CRISIL B/Stable Bank Loan Facility The rating reflects the company's high exposure to risks associated with the implementation of its on-going project, and its below-average financial risk profile driven by high project gearing. These rating weaknesses are partially offset by the promoters' industry experience and their funding support. Outlook: Stable CRISIL believes that MCFPPL will benefit from the commencement of commercial production from December 2014. The outlook maybe revised to 'Positive' in case of timely completion of project within the budgeted cost along with better-than-expected cash accruals during the initial phase of operations. Conversely, the outlook maybe revised to 'Negative' in case of any unanticipated delays in commencement of operations or low cash accruals or significant working capital requirements, putting further pressure on the company's liquidity. Established in 2013, MCFPPL is setting up a par-boiled and raw rice processing unit in Rohtas, Bihar. The company plans to start commercial operations in December 2014 and is promoted by Mr. Rahul Kumar and family. METCUT TOOLINGS: CRISIL Reaffirms D Rating on INR60MM Cash Credit ----------------------------------------------------------------- CRISIL's ratings on the bank facilities of Metcut Toolings Pvt Ltd continue to reflect instances of delay by the company in servicing its term debt because of weak liquidity. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 60 CRISIL D (Reaffirmed) Letter of Credit 15 CRISIL D (Reaffirmed) Long Term Loan 16.8 CRISIL D (Reaffirmed) Proposed Long Term Bank Loan Facility 67.7 CRISIL D (Reaffirmed) MTPL also has a small scale of, and working-capital-intensive, operations and its business risk profile is susceptible to slowdown in the demand from the end-user industry and volatility in raw material prices. These rating weaknesses are partially offset by the extensive experience of MTPL's promoters in the carbide cutting tools industry and its moderate financial risk profile. Update MTPL has been continuously delaying on its term debt obligations. The delays are on account of the company's weak liquidity as evident from the high bank limit utilisation of about 99.9 per cent during the 12 months through April 2014. MTPL's net cash accruals are expected to be insufficient to meet the debt repayment obligations of around INR15.6 million per annum over the medium term. CRISIL believes that MTPL's liquidity will remain weak over the medium term on account of its working-capital- intensive operations. MTPL reported provisional operating income of INR89.60 million in 2013-14 (refers to financial year, April 1 to March 31). Incorporated in 1989, MTPL manufactures carbide cutting tools that are primarily used in the automotive industry. The company is promoted by Mr. Kushal J Shetty. MITHILANCHAL INDUSTRIES: ICRA Cuts Rating on INR6cr LT Loan to D ----------------------------------------------------------------- ICRA has revised the long-term rating assigned to the INR1.81 crore term loan facility and INR6.00 crore cash credit facility of Mithilanchal Industries Private Limited from [ICRA]B to [ICRA]D. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term: Fund Based 1.81 [ICRA]D Revised from Limits (Term loans) [ICRA]B Long term: Fund Based 6.00 [ICRA]D Revised from Limits (Cash Credit) [ICRA]B The revision of rating stakes into account the delays in debt servicing by the company in the current fiscal, due to its stretched liquidity position (as evident from high utilisation of working capital bank facilities) given the high receivables for the company and the weak financial profile as characterised by subdued profitability levels, the highly leveraged capital structure and high working capital intensity of operations. The ratings are further constrained by the limited track record and small scale of operations of the company and the vulnerability of the company's profitability to the fluctuations in the crude-oil linked prices of raw materials and the cyclicality inherent in the textile industry. The rating also factors in the intense competitive forces due to the fragmented nature of the industry. The rating however continues to draw comfort from the long presence of the promoters in the field of manufacturing various jari products and the locational advantage available to the company by virtue of its presence in Surat, in close proximity to raw material sources and end customers. ICRA also notes the backward integration for the company through its group concerns, which ensures a steady supply of metallised polyester film. Mithilanchal Industries Private Limited (MIPL) was incorporated in April 2012 and commenced the commercial production of jari yarn in April 2013. The company was formed by taking over the operations of a group concern, viz. Telstar Enterprise (TE), which had been involved in the production of metallic yarn used in the production of jari. The operations at the existing unit of TE have meanwhile, been discontinued. In FY 2014, TIPL reported a profit before depreciation and tax of INR0.04 crore on operating income of INR17.01 crore (provisional). MITS MEGA: CRISIL Assigns 'B+' Rating to INR200MM Bank Loan ----------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term bank facilities of MITS Mega Food Park Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term 200 CRISIL B+/Stable Bank Loan Facility The rating reflects the susceptibility of MITS's business risk profile to risks related to project implementation, project offtake, and funding. These rating weaknesses are partially offset by favourable government policies towards mega food park projects. Outlook: Stable CRISIL believes that MITS will benefit from the favourable government policies towards mega food park projects, over the medium term. The outlook may be revised to 'Positive' if MITS commissions its mega food park project without any significant time or cost overruns and records better-than-expected demand for its project, resulting in substantial cash accruals. Conversely, the outlook may be revised to 'Negative' if there are significantly delays in commencement of the project, thereby leading to cost overruns or if the demand for the project is lower than expectations, resulting in a constrained financial risk profile. MITS, incorporated in 2011, is a special-purpose vehicle (SPV) formed to set up an integrated food processing park in Rayagada (Odisha). The park is being set up under the Mega Food Park Scheme of the Ministry of Food Processing Industries, Government of India, which provides operational and financial support to private players for setting up such facilities. The SPV is promoted by a group of entities; the primary stakeholder being Basantdevi Charitable Trust. MITS's day-to-day operations are managed by Mr. Sriram Panda. MITTAPALLI SPINNERS: CRISIL Suspends B- Rating on INR408MM Loan --------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Mittapalli Spinners Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 10 CRISIL A4 Suspended Cash Credit 150 CRISIL B-/Stable Suspended Long Term Loan 408 CRISIL B-/Stable Suspended Proposed Long Term Bank Loan Facility 1.4 CRISIL B-/Stable Suspended The suspension of ratings is on account of non-cooperation by MSL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, MSL is yet to provide adequate information to enable CRISIL to assess MSL'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' MSL, promoted by Mr. M V Koteswara Rao and his family members, has set up a cotton spinning unit with 24,480 spindles in Narasaraopet, Guntur (Andhra Pradesh). MSL started commercial operations from January 2012. The promoters have been in Guntur for more than four decades, and own five colleges and two rice mills in the same district. MJ & SONS: CRISIL Reaffirms D Rating on INR470MM Long Term Loan --------------------------------------------------------------- CRISIL's rating on the long-term bank facility of MJ & Sons Distilliery & Breweries Pvt Ltd continues to reflect instances of delay by MJS in servicing its term debt; the delays have been caused by cash flow mismatches and low cash accruals vis-a-vis large repayment obligations, which, in turn, have been caused by MJS' weak liquidity. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 170 CRISIL D (Reaffirmed) Long Term Loan 470 CRISIL D (Reaffirmed) MJS also has working-capital-intensive operations. However, MJS' business risk profile is supported by its promoters' industry experience. MJS was established in October 2005 by Mr. Shiv Kumar to manufacture extra neutral alcohol and country liquor from food grains. The company's plant is located in Patna (Bihar). NARESH KUMAR: ICRA Suspends B/A4 Ratings on INR16cr FB Limits ------------------------------------------------------------- ICRA has suspended [ICRA]B and [ICRA]A4 ratings assigned to the INR16 crore fund based limits and INR2 crore unallocated limits of M/s. Naresh Kumar Rajendra Kumar. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. Naresh Kumar Rajendra Kumar was initially set up as a proprietorship firm in 1980 by Mr. Mahaveer Prasad Vijay. In 2011, the firm was converted into partnership firm and Mr Naresh Kumar Vijay and Mr Rajendra Kumar Vijay (sons of Mr. Mahaveer Prasad Vijay) joined as partners. The firm is engaged in trading of various agro commodities mainly wheat. NKRK has its trading office located at Baran, Rajasthan in close proximity of food grains market which ensures easy availability of agro commodities. NKRK has also set up a wheat processing facility at Baran, Rajasthan for cleaning and packaging of wheat. The processed wheat is sold under brand name "Lal Badshah" and "Kitchen Queen". OM SAI: CRISIL Reaffirms 'B' Rating on INR100MM Cash Credit ----------------------------------------------------------- CRISIL's rating on the long term bank facilities of Om Sai Cotton Industries (OSCI) continues to reflect OSCI's modest scale of operations in the fragmented cotton industry and its below-average financial risk profile marked by small net worth, high gearing, and subdued debt protection metrics. The rating also factors in the susceptibility of OSCI's operating margin to fluctuations in raw material prices. These rating weaknesses are partially offset by the extensive industry experience of OSCI's promoters. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 100 CRISIL B/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 36 CRISIL B/Stable (Reaffirmed) Term Loan 14 CRISIL B/Stable (Reaffirmed) Outlook: Stable CRISIL believes that OSCI will continue to benefit over the medium term from the experience of its promoters in the cotton industry. The outlook may be revised to 'Positive' if the company reports higher-than-expected revenues while maintaining its profitability and improving its capital structure. Conversely, the outlook may be revised to 'Negative' in case of a decline in OSCI's revenues or profitability, or if the company undertakes a large, debt- funded capital expenditure programme, resulting in deterioration in the company's financial risk profile. OSCI was set up in 2010 as a partnership firm by Mr. B Parameswar, Mr. H J Reddy, Mr. H V Reddy, Mrs. C Aruna, and Mrs. G Swathi. The firm is engaged in cotton ginning and pressing. Mr. B. Parameswar earlier traded actively in cotton. OSCI processes raw cotton (kapas) into cotton bales and cotton seeds, and caters to markets of Kerala, Andhra Pradesh, Telangana, and Maharashtra. It has a ginning and pressing unit in Warangal (Telangana). On a provisional basis, OSCI reported profit after tax (PAT) of INR8.5 million on net sales of INR647.9 million for 2013-14 (refers to financial year, April 1 to March 31), against PAT of INR1.0 million on net sales of INR439.5 million for 2012-13. RDS & SONS: CRISIL Assigns 'B' Rating to INR54.8MM Term Loan ------------------------------------------------------------ CRISIL has assigned its 'CRISIL B/ Stable' rating to the long-term bank facilities of RDS & Sons Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 20 CRISIL B/Stable Term Loan 54.8 CRISIL B/Stable The rating reflects RDS's exposure to risks related to the initial stage of operations. The rating also factors in the company's below-average financial risk profile, with stretched liquidity, due to large debt-funded capital expenditure and expected low cash accruals and large working capital requirements. These rating weaknesses are partially offset by the extensive experience of RDS's promoter in the agro products trading and transportation businesses. Outlook: Stable CRISIL believes that RDS will continue to benefit over the medium term from its promoter's extensive business experience. The outlook may be revised to 'Positive' if the company successfully ramps up its operations through timely implementation of its on- going project and witnesses substantial cash accruals. Conversely, the outlook may be revised to 'Negative' in case RDS registers further weakening of its financial risk profile, particularly its liquidity, due to delay in project implementation, lower ramp up , or larger-than-expected working capital requirements. RDS, set up in 2013, is promoted by Mr. Ram Das Sahu of Palamau (Jharkhand). The company is setting up an 8-tonne-per-hour rice milling unit in Palamau; it is expected to commence commercial production in October 2014. UNIQUE GEM: ICRA Downgrades Rating on INR50cr LT FB EBD to 'D' -------------------------------------------------------------- ICRA has revised the long term rating assigned to the INR50 crore fund based facilities and INR10 crore unallocated amount of Unique Gem & Jewellery to [ICRA]D from [ICRA]B+. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Fund 50.00 Revised to [ICRA]D Based EBD from [ICRA]B+ Sub-limit within (50.00) Revised to [ICRA]D Fund Based Limit from [ICRA]B+ EBR Sub-limit within (08.00) Revised to [ICRA]D Fund Based Limit- from [ICRA]B+ Forward Contract Unallocated Amount 10.00 Revised to [ICRA]D from [ICRA]B+ The rating revision factors in UGJ's recent instances of delays in debt servicing reflecting highly stressed liquidity position due to delays in realizing receivables. The rating also takes into account the susceptibility of firm's profit margins to foreign exchange fluctuations and fluctuations in gold and diamond prices. ICRA also notes the competitive pressures faced by UGJ from organized and unorganized players in the fragmented gems & jewellery industry and risks arising from geographically clustered and concentrated clientele. The rating however favorably factors in UGJ's procurement process which is backed by orders, thereby limiting exposure to raw material price fluctuations and operational support received from group concern engaged in similar line of business. Unique Gem and Jewellery (UGJ) is a closely held partnership company that commenced operations in 2009. Mr. P.H Walia and Mr. Sanjay Walia as its partners hold 50% share each. UGJ is engaged in manufacturing and exporting hand crafted diamond studded jewelleryand has its manufacturing facility at Surat SEZ. The firm has an associate concern, Blackstone Gem & Jewellery, operational since 2009 engaged in manufacturing diamond studded gold jewellery. Recent Results UGJ recorded a profit after tax (PAT) of INR2.41 crore on operating income of INR152.86 crore for the year ending March 31, 2013. UTKAL REALTORS: ICRA Suspends 'B' Rating on INR30cr Term Loan ------------------------------------------------------------- ICRA has suspended [ICRA]B rating assigned to the INR30.0 crore term loan of Utkal Realtors Private Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. VISHNU CARRIERS: CRISIL Reaffirms D Rating on INR90MM Cash Credit ----------------------------------------------------------------- CRISIL's ratings on the bank facilities of Vishnu Carriers Pvt Ltd continue to reflect the company's overdrawn inventory funding facility for more than 30 days owing to its weak liquidity. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 20 CRISIL D (Reaffirmed) Cash Credit 90 CRISIL D (Reaffirmed) Proposed Long Term Bank Loan Facility 1 CRISIL D (Reaffirmed) Term Loan 8 CRISIL D (Reaffirmed) VCPL is susceptible to economic cyclicality, and is exposed to intense competition in the automobile dealership industry. However, the company benefits from its promoters' extensive industry experience in the auto dealership industry. VCPL was promoted in 1989 by Mr. I Venkat Rao, Mr. G Sanyasi Raju, Mr. I Vishnu Rao, and Mrs. I Deepa. The company is an authorized dealer of Tata Motors Ltd for its entire range of light and medium commercial vehicles. The company has a showroom, a workshop, and four small marketing-cum-sales offices in Visakhapatnam (Andhra Pradesh). ZAZSONS EXPORTS: ICRA Ups Rating on INR23.2cr Packing Loan to B+ ---------------------------------------------------------------- ICRA has revised the long-term rating assigned to the INR23.20 crore packing credit and INR12 crore foreign bill purchase limits of Zazsons Exports Limited to [ICRA]B+ from [ICRA]B. ICRA has also reaffirmed [ICRA]A4 rating to the INR2.00 crore non fund based limits of ZEL. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Packing Credit 23.20 Revised to [ICRA]B+ from [ICRA]B Foreign Bill Purchase 12.00 Revised to [ICRA]B+ from [ICRA]B Non fund based limits 2.00 Reaffirmed at [ICRA]A4 The rating upgrade takes into account the improved liquidity position of Zaz group as reflected by healthy and improved financial risk profile of ZEL's subsidiary Z Square Mall Private Limited to whom ZEL has given corporate guarantee. The ratings also derive comfort from the ZEL's experienced management, improvement in net profit margins and capital structure of company and its established relationship with key customers and suppliers in the past .The rating however continues to be constrained by the intensely competitive nature of footwear industry with presence of numerous organized and unorganized players which has resulted in modest profit margins of the company. The ratings also factor in the weak financial profile of company as reflected by declining/stagnant revenues in the past three years, weak coverage indicators and high working capital intensity of the business. Going forward, ability of the company to increase its scale of operations in a profitable manner while improving working capital intensity will be key rating sensitivities. ZEL was incorporated in 1985 and is promoted by Kanpur-based Hussain family who has been engaged in the leather business since 1862. The promoters Mr. Zakir Hussain, Mr. Afzal Hussain, and Mr. Zahid Hussain were initially involved in trading of raw hides and later founded the ZAZ group. In 1964, the group established its first tannery, Zaz Tannery. In 2005, the promoters split the group and currently Mr. Tahir Hussain and his family owns ZEL. ZEL has the capacity to manufacture finished leather of 1.82 million pieces per annum, shoe uppers of 1.5 lakh pairs per annum and finished footwear of around 1.5 lakh pairs per annum. The group also operates a shopping mall in Kanpur through ZEL's subsidiary, Z Square Mall Private Limited. ZEL reported a net profit of INR0.74 crores on an operating income of INR53.89 crores in FY14 (provisional results) as against net profit of INR0.46 crores on an operating income of INR53.65 crores in FY13. ========= J A P A N ========= TAKEFUJI CORP: BofA's Merrill Japan Ordered to Pay Damages ---------------------------------------------------------- Takahiko Hyuga at Bloomberg News reports that Bank of America Corp. Japanese brokerage unit was ordered to pay JPY14.5 billion ($140 million) by the Tokyo High Court for its role in a bond transaction with failed consumer lender Takefuji Corp. Bloomberg relates that the court on August 27 ordered Merrill Lynch Japan Securities Co. and an affiliate to pay compensation for losses stemming from the 2007 bond deal, overturning a district court judgment made last year, TFK, an entity responsible for repaying creditors following Takefuji's 2010 bankruptcy, said in a statement on its website on August 27. Merrill Lynch hasn't decided whether it will appeal to the Supreme Court, said Tsukasa Noda, a Tokyo-based spokesman, according to Bloomberg. The firm will examine the ruling and make a decision, he added. Charlotte, North Carolina-based Bank of America acquired Merrill Lynch in 2009. Bloomberg says Takefuji sued Merrill Lynch in 2010 for about JPY29 billion, arguing the brokerage failed to sufficiently explain the risks in the transaction designed to lower the consumer lender's interest costs. The deal involved Takefuji investing JPY30 billion in a credit-linked security that was later liquidated as the securities backing it slumped, Bloomberg notes. About Takefuji Takefuji Corporation (TYO:8564) -- http://www.takefuji.co.jp/-- is a Japan-based company mainly engaged in the consumer finance business. The Company operates in two business segments. The Consumer Finance segment covers the loan and credit card businesses. The Others segment is involved in the operation of golf courses, the development, management and leasing of real estate, the venture capital business, as well as the investment business, among others. The Company has eight subsidiaries. Takefuji filed a bankruptcy petition with the Tokyo District Court on Sept. 28, 2010, with debts of JPY433.6 billion. Bloomberg News has said the company has become the biggest casualty of Japan's four-year crackdown on coercive lending practices by consumer finance companies. The lender is seeking to restructure as borrower claims of overpaid interest are estimated to exceed JPY1 trillion. As reported in the Troubled Company Reporter-Asia Pacific on Nov. 7, 2011, Bankruptcy Law360 said that Tokyo court confirmed the company's reorganization plan after most creditors voted in support of the plan, which will repay 20% of its total debt of JPY1.5 trillion ($19.8 billion). Law360 related that 100% of secured creditors voted in favor of the plan, while 85.43% of unsecured creditors voted for it. According to the company, it will begin making repayments under the plan in mid-December. =============== M A L A Y S I A =============== MALAYSIA AIRLINES: Shares Suspended Ahead of Revamp Announcement ---------------------------------------------------------------- Reuters reports that shares in Malaysia Airlines (MAS) have been suspended today, August 29, ahead of a material announcement. MAS said its shares were suspended from 9:00 a.m., confirming an earlier report by Reuters. Reuters relates that the share suspension comes ahead of the announcement of the airline's planned restructuring, which could include job cuts and a change in top management. Khazanah Nasional, the airline's majority shareholder, will be holding a press conference on MAS at 3:00 p.m. today, August 29, says Reuters. MAS reported a net loss of MYR307.04 million in its second quarter and said its earnings in the second half will be hit by lower passenger bookings after the two jet disasters this year, the news agency adds. Headquartered in Selangor, Malaysia, state-owned Malaysia Airlines -- http://www.malaysiaairlines.com/-- engages in the business of air transportation and the provision of related services. Last year, Malaysia Airlines reported a net loss of MYR1.17 billion ($359 million), its third consecutive year of net losses, according to The Wall Street Journal. In the first three months this year, its net loss widened to MYR443 million from MYR279 million a year earlier, the Journal disclosed. MALAYSIA AIRLINES: Exec Chair Appointment Maybe Included in Plan ---------------------------------------------------------------- Malaysia Chronicle reports that Malaysia Airlines' major restructuring could see the reintroduction of the executive chairman's post, which was abolished after the era of its former boss, Tan Sri Tajudin Ramli, in the early 2000s. According to the report, sources said MAS' parent company, Khazanah Nasional Bhd, is considering the idea to enable the ailing airline's new head honcho to be involved in both its board and management. The current chairman is not directly involved in MAS' daily operations, the report notes. Malaysia Chronicle says three names are being considered for the new post, and they include Tan Sri Ahmad Johan of Airod group. The report relates that the new executive chairman will have to work hand-in-hand with MAS' new chief executive officer, who will replace Ahmad Jauhari Yahya, to helm it back to profitability. Sources also said the comprehensive restructuring could also see certain subsidiaries of MAS being spun off and held under a new holding company, and that some European and Asian routes getting the chop, Malaysia Chronicle adds. Malaysia Chronicle says a new business strategy for MAS, and its subsidiaries, FlyFirefly Sdn Bhd (FireFly) and MAS Engineering Sdn Bhd, could be put in place. Firefly may take over MAS' domestic and regional (Asean) network by reviving its jet operations, while maintaining its turboprop operations, according to the report. Headquartered in Selangor, Malaysia, state-owned Malaysia Airlines -- http://www.malaysiaairlines.com/-- engages in the business of air transportation and the provision of related services. Last year, Malaysia Airlines reported a net loss of MYR1.17 billion ($359 million), its third consecutive year of net losses, according to The Wall Street Journal. In the first three months this year, its net loss widened to MYR443 million from MYR279 million a year earlier, the Journal disclosed. MALAYSIA AIRLINES: MAS Denies 'Empty Flight' Report --------------------------------------------------- Yuen Meikeng at The Star reports that Malaysia Airlines has de-bunked a report by an Australian news portal that described one of its planes as nearly empty, saying that the London-KL flight was actually over 90% full. The Star relates that the portal -- news.com.au -- had alleged that the airline was "burning through its cash reserves" to stay afloat and used pictures in social media by passengers showing empty seats and check-in lines. One photograph used by the portal was by MasterChef UK 2014 winner Catherine Chin Wan Ping Coombes, who later defended MAS, saying that Flight MH01 was full and that families with children boarded first, the Star says. In an e-mail to The Star, MAS said it appreciated the support given by Ms. Chin. "The MH01 flight carried 464 passengers. MAS is touched by the ongoing support of its loyal guests and it strives to provide world-class service to all its passengers," MAS, as cited by The Star, said. The report says Malaysians, who have been on MAS flights after the MH17 incident on July 17, have also come out to defend the airline. According to the Star, communications student Carmen Teoh, who took a MAS flight to London, said her flights to and from the British capital were all full. "The Caucasian lady next to me seemed nervous and even stopped a steward to ask why the flight route seemed to have deviated but it was all okay in the end," said the 23-year-old, The Star relays. "If we Malaysians do not stand by our national carrier, then who will?" she said. The Star adds that IT consultant Johari Yusof, 36, said his flight back to Malaysia from London three days ago was about 80% full. "When there was turbulence, some could afford to laugh. There were also more foreign passengers than Malaysians," the report quotes Mr. Yusof as saying. According to The Star, senior manager Elly Yusof, 40, intentionally chose MAS for all her destinations to support the airline after the MH370 incident and will be flying MAS to Cambodia this Sunday [August 31]. "Rather than 'abandoning' or bad-mouthing our national airline in its time of difficulty, we should try to support it instead," Ms. Yusof, as cited by The Star, said. Khazanah Nasional will announce today, August 29, its restructuring plan for MAS, the report adds. Headquartered in Selangor, Malaysia, state-owned Malaysia Airlines -- http://www.malaysiaairlines.com/-- engages in the business of air transportation and the provision of related services. Last year, Malaysia Airlines reported a net loss of MYR1.17 billion ($359 million), its third consecutive year of net losses, according to The Wall Street Journal. In the first three months this year, its net loss widened to MYR443 million from MYR279 million a year earlier, the Journal disclosed. ==================== N E W Z E A L A N D ==================== METRO BAR: Bar Owner Faces Five-year Ban Bid from Running Cos. -------------------------------------------------------------- Hamish McNeilly at Otago Daily Times reports that a former Dunedin bar owner who left a string of failed hospitality companies behind him may be banned from running a company for five years. Otago Daily relates that earlier this year, three hospitality companies, Metro Bar (Dunedin) Ltd, 2 Mooses Tavern Ltd and The Church Nightclub Ltd, were placed in liquidation, owing Inland Revenue almost NZ$230,000. Bar co-owner Ben Hanssen, along with his business partner, had interests in Dunedin bars Metro, Monkey Bar, Diamond Lounge- Rumours and the Clarendon Hotel, the report recalls. According to Otago Daily, a final report on Metro Bar (Dunedin) Ltd by liquidators Insolvency Management includes a recommendation Mr. Hanssen "should be prohibited from being a director of a company for a period of five years." Otago Daily says that the liquidators noted the company, which was incorporated in March 2011 and ceased trading late last year, had no assets available for the liquidation. Liquidators were provided with minimal information about the company and its affairs, as no company financial accounts could be obtained, the report says. Otago Daily notes that Don Millis -- don@insolvency.co.nz -- of Insolvency Management, confirmed a recommendation had been made to the Registrar of Companies to ban Mr. Hanssen as a director. That recommendation was still being investigated, the report adds. Mr. Millis said Insolvency Management was appointed to deal with the liquidations of insolvent companies associated with Mr Hanssen, the report relays. "We are also aware of other insolvent companies he is associated with," the liquidators said in their final report cited by Otago Daily. * MALCOLM SHEARER: Settles Debt to Avoid Bankruptcy --------------------------------------------------- The Press reports that Malcolm David Shearer, 60, finds it hard to stay out of financial trouble. The Christchurch businessman's name was on the court bankruptcy list in the High Court in Christchurch again, three years after he was discharged from his last bankruptcy, according to The Press. Auckland-based construction company Southern Recon had taken the proceedings to recover a debt but Mr. Shearer avoided adjudication by settling, The Press notes. The report recalls that Mr. Shearer was sentenced in 2012 on five charges of cheque fraud relating to 2009 when he wrote cheques on bank accounts which had been closed. All five people affected by those frauds were eventually paid. Mr. Shearer was bankrupted in September 2008 and discharged in September 2011. Mr. Shearer's latest venture, house relocation business Aylesbury Developments Company Ltd, went into liquidation in September last year with debts of about $350,000, the report notes. Mr. Shearer claimed lack of working capital and economic conditions had caused the company failure. ==================== S O U T H K O R E A ==================== MAGNACHIP SEMICONDUCTOR: S&P Lowers CCR to B+; Outlook Negative --------------------------------------------------------------- Standard & Poor's Ratings Services said it has lowered its long- term corporate credit and debt ratings on Korea-based analog and mixed-signal semiconductor manufacturer MagnaChip Semiconductor Corp. (MagnaChip) to 'B+' from 'BB-'. The outlook on the long- term corporate credit rating is negative. "The downgrade reflects our assessment of the company's management and governance as weak as a result of growing uncertainties over the timing and scope of the restatement and filing of its financial statements," said Hong Kong-based credit analyst JunHong Park. "The rating action also reflects a likelihood that the negative effect on the company's business and financial conditions will be larger than we had previously expected." On Aug. 12, 2014, the company announced an expansion of the scope of an internal review and revealed that it included errors and adjustments related to revenue recognition, cost of goods sold, inventory and reserves, and related business practices, for both distributor and nondistributor customers. Also, the company indicated that some of the adjustments could have a material impact on certain intervals in the restatement periods. S&P believes the expanded scope of the company's internal review and the continued delay in financial reporting show substantial weakness in its internal controls, financial reporting, and transparency. Reflecting this, S&P has revised its assessment of MagnaChip's management and governance to "weak" from "fair." S&P has also made a somewhat negative revision to its base-case scenario to reflect the potential for the restatements to have a higher impact than S&P expected. Still, S&P sees uncertainties in the potential for the restatement to lead to a substantial deviation in S&P's base-case assumptions about revenue and profitability-related ratios for the company. However, in S&P's base case, it do not expect the restatements to substantially alter the company's cash flows apart from extra interest payments to holders of US$225 million in its bonds as a result of a covenant breach. S&P's base case continues to anticipate that the restatement event will have a limited negative effect on the company's liquidity, given that it had cash and equivalents of about $150 million as of the end of 2013 and no scheduled debt repayments in 2014. Nonetheless, while a low likelihood, bondholders could choose to accelerate bond repayments under the bond indenture if the company fails to deliver its financial statements by Feb. 13, 2015. S&P continues to assess the company's business risk profile as "weak," reflecting volatility in the semiconductor industry, potential variability in the company's operating performance, and its relatively small scale. S&P views MagnaChip's financial risk profile as "significant," reflecting the company's moderate debt and potential variability in measures of its financial condition. In S&P's base-case scenario, it anticipates that MagnaChip will be able to maintain a ratio of debt to EBITDA of about 2.5x-3.0x. The negative outlook reflects increasing uncertainties about the timing and scope of the company's financial restatements and the impact on its business and financial conditions. S&P may lower the ratings if it sees an increasing likelihood of an acceleration in bond repayments, such as if the company does not complete its financial reporting and restatements by late Nov. of 2014. S&P could also lower the ratings if the restatement has a significantly negative financial impact on the company or if its profitability and cash flows decline substantially due to a weakening competitive position. A ratio of debt to EBITDA exceeding 3.0x could indicate such a deterioration. S&P may revise the outlook to stable if the restatement does not materially change the company's profitability and measures of its cash flow, leading S&P to believe the company could maintain a level of profitability comparable with the average for its industry and debt to EBITDA below 3.0x on a sustainable basis. =============== X X X X X X X X =============== * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Total Shareholders Assets Equity Company Ticker (US$MM) (US$MM) ------- ------ ------ ------------ AUSTRALIA AAT CORP LTD AAT 32.50 -13.46 ANITTEL GROUP LT AYG 18.43 -0.26 ATLANTIC LTD ATI 490.17 -25.68 AUSTRALIAN ZI-PP AZCCA 77.75 -2.57 AUSTRALIAN ZIRC AZC 77.75 -2.57 BIRON APPAREL LT BIC 19.71 -2.22 BOUNTY MINING LT BNT 10.54 -0.94 CLARITY OSS LTD CYO 33.12 -11.66 CMA CORP LTD CMV 127.41 -51.00 CWH RESOURCES LT CWH 10.71 -3.03 IDM INTERNATIONA IDM 30.99 -23.62 LIONHUB GROUP LT LHB 19.21 -26.52 MIRABELA NICKEL MBN 335.09 -179.03 NATURAL FUEL LTD NFL 19.38 -121.51 PACT GROUP HOLDI PGH 1,120.30 -982.11 PENRICE SODA HOL PSH 122.46 -26.85 RIVERCITY MOTORW RCY 386.88 -809.13 RUBICOR GROUP LT RUB 45.20 -75.31 STERLING PLANTAT SBI 59.08 -6.07 STIRLING RESOURC SRE 16.53 -8.12 STRAITS RESOURCE SRQ 208.51 -29.73 SWAN GOLD MINING SWA 36.43 -9.08 TZ LTD TZL 12.88 -8.73 CHINA ANHUI GUOTONG-A 600444 79.12 -10.53 CHANG JIANG-A 520 770.91 -176.56 CHINA GREAT LAND CGL 16.52 -19.01 CHINA OILFIELD T COT 22.00 -16.71 FORGAME HOLDINGS 484 83.73 -21.92 HEBEI BAOSHUO -A 600155 114.00 -104.15 HULUDAO ZINC-A 751 507.79 -532.25 HUNAN TIANYI-A 908 59.37 -1.14 JIANGSU ZHONGDA 600074 338.59 -29.88 NANNING CHEMIC-A 600301 391.41 -43.60 QINGDAO YELLOW 600579 122.36 -71.04 QINGHAI SUNSHI-A 600381 394.70 -78.28 SHENZ CHINA BI-A 17 28.50 -283.65 SHENZ CHINA BI-B 200017 28.50 -283.65 SHIJIAZHUANG D-A 958 241.31 -111.50 SHUNFENG PHOTOVO 1165 411.73 -51.06 TAIYUAN TIANLO-A 600234 63.28 -17.71 WUHAN BOILER-B 200770 217.13 -213.03 WUHAN XIANGLON-A 600769 77.45 -103.43 YUNNAN JINGGU FO 600265 84.92 -2.90 HONG KONG BIRMINGHAM INTER 2309 59.95 -12.80 BUILDMORE INTL 108 17.36 -70.34 CHINA ENVIRONMEN 986 66.65 -0.87 CHINA HEALTHCARE 673 34.76 -0.75 CHINA OCEAN SHIP 651 248.21 -106.72 CNC HOLDINGS 8356 99.16 -9.03 CROSBY CAPITAL 8088 16.40 -20.27 EFORCE HLDGS LTD 943 60.73 -9.56 GRANDE HLDG 186 255.10 -208.18 INNO-TECH HLDGS 8202 84.54 -116.82 LANGHAM -SS 1270 684.55 -86.21 LONG SUCCESS INT 8017 50.05 -7.44 MASCOTTE HLDGS 136 57.51 -81.70 MEGA EXPO HOLDIN 1360 17.00 -0.53 MELCOLOT LTD 8198 13.69 -28.83 NORSTAR FOUNDERS 2339 21.97 -56.33 PALADIN LTD 495 159.65 -9.17 PROVIEW INTL HLD 334 314.87 -294.85 SINO RESOURCES G 223 29.34 -24.77 SURFACE MOUNT SMT 32.88 -10.68 VXL CAPITAL LTD 727 74.79 -0.16 INDONESIA APAC CITRA CENT MYTX 176.66 -6.99 ARPENI PRATAMA APOL 249.84 -319.77 ASIA PACIFIC POLY 375.58 -815.83 BUMI RESOURCES BUMI 7,027.47 -18.17 ICTSI JASA PRIMA KARW 56.41 -6.12 JAKARTA KYOEI ST JKSW 24.92 -34.90 MATAHARI DEPT LPPF 209.66 -89.74 ONIX CAPITAL TBK OCAP 13.22 -1.03 RENUKA COALINDO SQMI 15.84 -0.48 SUMALINDO LESTAR SULI 95.14 -18.99 UNITEX TBK UNTX 18.83 -18.53 INDIA ABHISHEK CORPORA ABSC 53.66 -25.51 AGRO DUTCH INDUS ADF 85.09 -22.81 ALPS INDUS LTD ALPI 201.29 -41.70 AMIT SPINNING AMSP 12.85 -7.68 ARTSON ENGR ART 11.81 -10.16 ASHAPURA MINECHE ASMN 161.89 -51.58 ASHIMA LTD ASHM 63.23 -48.94 ATV PROJECTS ATV 48.47 -43.93 BELLARY STEELS BSAL 451.68 -108.50 BENZO PETRO INTL BPI 26.77 -1.05 BHAGHEERATHA ENG BGEL 22.65 -28.20 BLUE BIRD INDIA BIRD 122.02 -59.13 CELEBRITY FASHIO CFLI 24.96 -8.26 CHESLIND TEXTILE CTX 20.51 -0.03 CLASSIC DIAMONDS CLD 66.26 -6.84 COMPUTERSKILL CPS 14.90 -7.56 DCM FINANCIAL SE DCMFS 18.46 -9.46 DFL INFRASTRUCTU DLFI 42.74 -6.49 DIGJAM LTD DGJM 99.41 -22.59 DISH TV INDIA DITV 579.01 -28.55 DISH TV INDI-SLB DITV/S 579.01 -28.55 DUNCANS INDUS DAI 122.76 -227.05 ENSO SECUTRACK ENSO 15.57 -0.46 EURO CERAMICS EUCL 110.62 -6.83 EURO MULTIVISION EURO 36.94 -9.95 FERT & CHEM TRAV FCT 311.92 -35.19 GANESH BENZOPLST GBP 44.05 -15.48 GANGOTRI TEXTILE GNTX 54.67 -14.22 GOKAK TEXTILES L GTEX 46.36 -0.29 GOLDEN TOBACCO GTO 97.40 -18.24 GSL INDIA LTD GSL 29.86 -42.42 GSL NOVA PETROCH GSLN 16.53 -1.31 GUJARAT STATE FI GSF 10.26 -303.64 GUPTA SYNTHETICS GUSYN 44.18 -6.34 HARYANA STEEL HYSA 10.83 -5.91 HEALTHFORE TECHN HTEC 14.74 -46.64 HINDUSTAN ORGAN HOC 74.72 -24.07 HINDUSTAN PHOTO HPHT 49.58 -1,832.65 HMT LTD HMT 108.71 -572.12 ICDS ICDS 13.30 -6.17 INDAGE RESTAURAN IRL 15.11 -2.35 INTEGRAT FINANCE IFC 49.83 -51.32 JCT ELECTRONICS JCTE 80.08 -76.70 JENSON & NIC LTD JN 16.49 -71.70 JET AIRWAYS IND JETIN 3,368.77 -335.45 JET AIRWAYS -SLB JETIN/S 3,368.77 -335.45 JOG ENGINEERING VMJ 45.90 -5.28 KALYANPUR CEMENT KCEM 23.39 -42.66 KERALA AYURVEDA KERL 13.97 -1.69 KIDUJA INDIA KDJ 11.16 -3.43 KINGFISHER AIR KAIR 515.93 -2,371.26 KINGFISHER A-SLB KAIR/S 515.93 -2,371.26 KITPLY INDS LTD KIT 14.77 -58.78 KLG SYSTEL LTD KLGS 40.64 -27.37 LML LTD LML 43.95 -78.18 MADRAS FERTILIZE MDF 167.72 -56.20 MAHA RASHTRA APE MHAC 14.49 -12.96 MAHANAGAR TELE MTNL 4,845.41 -511.72 MAHANAGAR TE-SLB MTNL/S 4,845.41 -511.72 MALWA COTTON MCSM 44.14 -24.79 MILTON PLASTICS MILT 17.67 -51.22 MODERN DAIRIES MRD 38.61 -3.81 MOSER BAER INDIA MBI 727.13 -165.63 MOSER BAER -SLB MBI/S 727.13 -165.63 MTZ POLYFILMS LT TBE 31.94 -2.57 MURLI INDUSTRIES MRLI 262.39 -38.30 MYSORE PAPER MSPM 87.99 -8.12 NATL STAND INDI NTSD 22.09 -0.73 NAVCOM INDUS LTD NOP 10.19 -3.53 NICCO CORP LTD NICC 71.84 -4.91 NICCO UCO ALLIAN NICU 23.25 -83.90 NK INDUS LTD NKI 141.35 -7.71 NRC LTD NTRY 63.70 -53.01 NUCHEM LTD NUC 24.72 -1.60 PANCHMAHAL STEEL PMS 51.02 -0.33 PARAMOUNT COMM PRMC 124.96 -0.52 PARASRAMPUR SYN PPS 99.06 -307.14 PAREKH PLATINUM PKPL 61.08 -88.85 PIONEER DISTILLE PND 53.74 -5.62 PREMIER INDS LTD PRMI 11.61 -6.09 PRIYADARSHINI SP PYSM 20.80 -2.28 QUADRANT TELEVEN QDTV 150.43 -137.48 QUINTEGRA SOLUTI QSL 16.76 -17.45 RAMSARUP INDUSTR RAMI 433.89 -89.28 RATHI ISPAT LTD RTIS 44.56 -3.93 RELIANCE BROADCA RBN 86.97 -0.59 RELIANCE MEDIAWO RMW 425.22 -21.31 RELIANCE MED-SLB RMW/S 425.22 -21.31 RENOWNED AUTO PR RAP 14.12 -1.25 RMG ALLOY STEEL RMG 66.61 -12.99 ROLLATAINERS LTD RLT 22.97 -22.24 ROYAL CUSHION RCVP 14.70 -75.18 SAAG RR INFRA LT SAAG 12.54 -4.93 SADHANA NITRO SNC 16.74 -0.58 SANATHNAGAR ENTE SNEL 49.23 -6.78 SANCIA GLOBAL IN SGIL 78.82 -25.13 SBEC SUGAR LTD SBECS 92.44 -5.61 SCOOTERS INDIA SCTR 19.75 -13.35 SERVALAK PAP LTD SLPL 61.57 -7.63 SHAH ALLOYS LTD SA 168.13 -81.60 SHALIMAR WIRES SWRI 22.79 -27.18 SHAMKEN COTSYN SHC 23.13 -6.17 SHAMKEN MULTIFAB SHM 60.55 -13.26 SHAMKEN SPINNERS SSP 42.18 -16.76 SHREE GANESH FOR SGFO 44.50 -2.89 SHREE KRISHNA SHKP 14.62 -0.92 SHREE RAMA MULTI SRMT 38.90 -4.49 SIDDHARTHA TUBES SDT 75.90 -11.45 SIMBHAOLI SUGAR SBSM 268.76 -54.47 SITI CABLE NETWO SCNL 219.45 -9.68 SPICEJET LTD SJET 563.64 -41.19 SQL STAR INTL SQL 10.58 -3.28 STATE TRADING CO STC 826.29 -276.56 STELCO STRIPS STLS 14.90 -5.27 STI INDIA LTD STIB 21.69 -2.13 STL GLOBAL LTD SHGL 30.73 -5.62 STORE ONE RETAIL SORI 15.48 -59.09 SUPER FORGINGS SFS 14.62 -7.00 SURYA PHARMA SUPH 370.28 -9.97 TAMILNADU JAI TNJB 17.07 -1.00 TATA METALIKS TML 156.70 -5.36 TATA TELESERVICE TTLS 1,311.30 -138.25 TATA TELE-SLB TTLS/S 1,311.30 -138.25 TODAYS WRITING TWPL 18.58 -25.67 TRIUMPH INTL OXIF 58.46 -14.18 TRIVENI GLASS TRSG 19.71 -10.45 TUTICORIN ALKALI TACF 19.86 -19.58 UDAIPUR CEMENT W UCW 11.38 -10.53 UNIFLEX CABLES UFCZ 47.46 -7.49 UNIWORTH LTD WW 149.50 -151.14 UNIWORTH TEXTILE FBW 22.54 -35.03 USHA INDIA LTD USHA 12.06 -54.51 VANASTHALI TEXT VTI 14.59 -5.80 VENUS SUGAR LTD VS 11.06 -1.08 WANBURY LTD WANB 141.86 -3.91 JAPAN FLIGHT HOLDINGS 3753 10.10 -2.62 GOYO FOODS INDUS 2230 11.79 -1.51 HARAKOSAN CO 8894 186.55 -8.07 IDEA INTERNATION 3140 23.66 -0.08 KANMONKAI CO LTD 3372 42.64 -0.81 KOREA DVS KOREA CO LTD 46400 17.40 -1.20 ORIENTAL PRECISI 14940 224.92 -79.83 ROCKET ELEC-PFD 425 111.09 -0.42 ROCKET ELECTRIC 420 111.09 -0.42 SHINIL ENG CO 14350 199.04 -2.53 SSANGYONG ENGINE 12650 1,231.13 -119.47 STX OFFSHORE & S 67250 7,627.42 -1,124.38 TEC & CO 8900 139.98 -16.61 TONGYANG NETWORK 30790 311.91 -36.46 WOONGJIN HOLDING 16880 2,197.34 -635.50 MALAYSIA HAISAN RESOURCES HRB 41.31 -11.54 HIGH-5 CONGLOMER HIGH 41.63 -34.19 HO HUP CONSTR CO HO 59.28 -16.64 PETROL ONE RESOU PORB 51.39 -4.00 SUMATEC RESOURCE SMTC 169.12 -26.18 VTI VINTAGE BHD VTI 17.74 -3.63 NEW ZEALAND NZF GROUP LTD NZF NZ Equity 11.69 -4.60 PULSE ENERGY LTD PLE NZ Equity 11.29 -3.44 PHILIPPINES CYBER BAY CORP CYBR 14.14 -21.59 FIL ESTATE CORP FC 40.90 -15.77 FILSYN CORP A FYN 23.11 -11.69 FILSYN CORP. B FYNB 23.11 -11.69 GOTESCO LAND-A GO 21.76 -19.21 GOTESCO LAND-B GOB 21.76 -19.21 LIBERTY TELECOMS LIB 108.53 -19.42 MRC ALLIED INC MRC 27.06 -2.56 PICOP RESOURCES PCP 105.66 -23.33 STENIEL MFG STN 21.07 -11.96 UNIWIDE HOLDINGS UW 50.36 -57.19 SINGAPORE ADVANCE SCT LTD ASCT 19.68 -22.46 CEFC INTL LTD SUNE 95.25 -0.31 HL GLOBAL ENTERP HLGE 83.11 -4.63 IGG INC 8002 21.53 -55.84 SCIGEN LTD-CUFS SIE 68.70 -42.35 SUNMOON FOOD COM SMOON 20.26 -17.36 TT INTERNATIONAL TTI 298.35 -82.84 UNITED FIBER SYS UFS 65.52 -56.60 THAILAND ABICO HLDGS-F ABICO/F 15.28 -4.40 ABICO HOLDINGS ABICO 15.28 -4.40 ABICO HOLD-NVDR ABICO-R 15.28 -4.40 ASCON CONSTR-NVD ASCON-R 59.78 -3.37 ASCON CONSTRUCT ASCON 59.78 -3.37 ASCON CONSTRU-FO ASCON/F 59.78 -3.37 BANGKOK RUBBER BRC 77.91 -114.37 BANGKOK RUBBER-F BRC/F 77.91 -114.37 BANGKOK RUB-NVDR BRC-R 77.91 -114.37 CALIFORNIA W-NVD CAWOW-R 28.07 -11.94 CALIFORNIA WO-FO CAWOW/F 28.07 -11.94 CALIFORNIA WOW X CAWOW 28.07 -11.94 CIRCUIT ELEC PCL CIRKIT 16.79 -96.30 CIRCUIT ELEC-FRN CIRKIT/F 16.79 -96.30 CIRCUIT ELE-NVDR CIRKIT-R 16.79 -96.30 DATAMAT PCL DTM 12.69 -6.13 DATAMAT PCL-NVDR DTM-R 12.69 -6.13 DATAMAT PLC-F DTM/F 12.69 -6.13 ITV PCL ITV 36.02 -121.94 ITV PCL-FOREIGN ITV/F 36.02 -121.94 ITV PCL-NVDR ITV-R 36.02 -121.94 K-TECH CONSTRUCT KTECH 38.87 -46.47 K-TECH CONSTRUCT KTECH/F 38.87 -46.47 K-TECH CONTRU-R KTECH-R 38.87 -46.47 KUANG PEI SAN POMPUI 17.70 -12.74 KUANG PEI SAN-F POMPUI/F 17.70 -12.74 KUANG PEI-NVDR POMPUI-R 17.70 -12.74 MANGPONG 1989 PC MPG 11.83 -0.91 MANGPONG 1989 PC MPG/F 11.83 -0.91 MANGPONG 19-NVDR MPG-R 11.83 -0.91 PATKOL PCL PATKL 52.89 -30.64 PATKOL PCL-FORGN PATKL/F 52.89 -30.64 PATKOL PCL-NVDR PATKL-R 52.89 -30.64 PICNIC CORP-NVDR PICNI-R 101.18 -175.61 PICNIC CORPORATI PICNI 101.18 -175.61 PICNIC CORPORATI PICNI/F 101.18 -175.61 SAHAMITR PRESS-F SMPC/F 27.92 -1.48 SAHAMITR PRESSUR SMPC 27.92 -1.48 SAHAMITR PR-NVDR SMPC-R 27.92 -1.48 SHUN THAI RUBBER STHAI 19.89 -0.59 SHUN THAI RUBB-F STHAI/F 19.89 -0.59 SHUN THAI RUBB-N STHAI-R 19.89 -0.59 SUNWOOD INDS PCL SUN 19.86 -13.03 SUNWOOD INDS-F SUN/F 19.86 -13.03 SUNWOOD INDS-NVD SUN-R 19.86 -13.03 TONGKAH HARBOU-F THL/F 62.30 -1.84 TONGKAH HARBOUR THL 62.30 -1.84 TONGKAH HAR-NVDR THL-R 62.30 -1.84 TRANG SEAFOOD TRS 15.18 -6.61 TRANG SEAFOOD-F TRS/F 15.18 -6.61 TRANG SFD-NVDR TRS-R 15.18 -6.61 TT&T PCL TTNT 589.80 -223.22 TT&T PCL-NVDR TTNT-R 589.80 -223.22 TT&T PUBLIC CO-F TTNT/F 589.80 -223.22 WORLD CORP -NVDR WORLD-R 15.72 -10.10 WORLD CORP PCL WORLD 15.72 -10.10 WORLD CORP PLC-F WORLD/F 15.72 -10.10 TAIWAN BEHAVIOR TECH CO 2341S 30.90 -0.22 BEHAVIOR TECH-EC 2341O 30.90 -0.22 HELIX TECH-EC 2479T 23.39 -24.12 HELIX TECH-EC IS 2479U 23.39 -24.12 HELIX TECHNOL-EC 2479S 23.39 -24.12 POWERCHIP SEM-EC 5346S 2,036.01 -52.74 TAIWAN KOL-E CRT 1606U 507.21 -147.14 TAIWAN KOLIN-EN 1606V 507.21 -147.14 TAIWAN KOLIN-ENT 1606W 507.21 -147.14 ********* 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 ***